Register of Insolvencies
The register of insolvencies is a statutory register about the insolvency of individuals and businesses in Scotland.
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Inhibition is a diligence which prohibits a defender (or debtor) from dealing with his heritable property after the inhibition takes effect. Heritable property is land and other immoveable property (houses, commercial premises etc.) owned by the defender.
Inhibition is a personal diligence against the defender. While it is in place, it prevents the defender from selling, transferring or otherwise disposing of his property. It also prohibits the defender from securing any new loans against the property.
Inhibition can also be used when an action for the payment of debt is under consideration by the court but a decree has not yet been granted. This action is used to secure the debtor's property pending the outcome of the court action and is a form of diligence on the dependence.
Inhibition affects all heritable property owned by the debtor, except when it is limited by the court 'on the dependence' of an action or where the decree is granted in respect of an obligation to perform a particular act (for example, to transfer heritable property to someone else). An inhibition which is limited only applies to the property specified in the action, or specified by the Sheriff.
A creditor must have a decree (or relevant document of debt) before proceeding with inhibition. A schedule of inhibition must be served on the debtor and, where the debtor is an individual and the action is in respect of debt, the creditor must also provide a Debt Advice and Information Package. Generally the inhibition takes effect from the day it is registered in the Register of Inhibitions and Adjudications following service of the schedule of inhibition in accordance with section 155 of the Titles to Land Consolidation (Scotland) Act 1868. The exception to this is where a prior 'Notice of Inhibition' has been registered in which case the effect of the inhibition is backdated to the date the schedule of inhibition is served. This exception only applies where that service is registered before the expiry of 21 days from the registration of the Notice.
The debtor is prohibited from entering into any dealings with his heritable property for a period of five years. After five years, the inhibition ceases to have effect.
The inhibition does not give the creditor any preference if the debtor becomes bankrupt or in any other process where there is ranking.
Part 5 of the Bankruptcy & Diligence etc (Scotland) Act 2007, which commenced on 22 April 2009, made provision for many aspects of inhibition previously dealt with by common law.
This section of the website is intended to give a broad overview of diligence. It is not a full statement of the law nor does it provide a full description of each of the processes.