What is a decree?
A decree is an official decision from a Scottish court (like the Sheriff Court) ordering someone to pay money they owe.
Receiving a decree means a creditor (ie the person or business money is owed to) has taken legal action against the debtor (ie the person or business owing the money) and the court agrees that the debtor is liable for the debt. This is a serious legal matter and shouldn't be ignored.
A decree is recorded on the public register held by the Registry Trust. It stays on an individual's credit file for six years from the original judgment date, even if the debt is paid off within that time. This can significantly impact an individual's ability to get credit, loans, or mortgages.
What happens after a decree is issued?
If the court issues a decree against a debtor and they don't pay immediately, the creditor can take steps to enforce it. This typically begins with the creditor serving the debtor with a charge for payment notice. This is a formal demand for payment delivered by a sheriff officer (a Scottish bailiff). Once this is received, the debtor typically has 14 days to pay the debt in full.
If payment isn't made within that time, the creditor can use diligence (ie the legal term for debt enforcement in Scotland) to recover the money.
What types of diligence can be used?
Common methods of diligence include:
-
earnings arrestment, where deductions are taken directly from a debtor's wages
-
bank arrestment, where a debtor's bank account can be frozen, and funds taken from it
-
attachment, where a sheriff officer can take possession of certain assets owned by the debtor that are kept outside their home (eg in a garage or shed), like a car or money held outside your home (eg cash in a till). An attachment to money is known as a money attachment
How can diligence be challenged?
Even after diligence has begun, it may be possible to challenge a specific enforcement action, such as a payment order. This is a court order that a creditor must apply for after carrying out a money attachment.
A debtor must have good grounds to challenge a payment order, such as if:
-
the debtor does not own the money that has been attached
-
the money attachment is unduly harsh
-
the enforcement (eg the money attachment) has not been carried out properly
To challenge a money attachment, the debtor must apply to the Sheriff Court within 14 days of the creditor’s application for the payment order.
The Sheriff Court will hold a hearing with a sheriff. If the challenge is based on the debtor not owning the attached money, they will need evidence to prove this. The sheriff has the power to order that the money attachment be stopped and that any money taken be returned.
How should a debtor respond to a court claim?
Before a decree is issued, a debtor will receive an initial claim form from the Sheriff Court. The response depends on the procedure the court is using:
-
simple procedure generally used for claims under £5,000 that aren't legally complex
-
ordinary cause used for more complex cases or those valued over £5,000
In either case, there is a limited time to respond. The main options are generally to:
-
pay the debt in full
-
dispute the claim (if the debtor doesn't believe they owe the money)
-
admit the claim and ask for time to pay
It's crucial for the debtor to respond by the deadline. If the claim is ignored, the court will likely issue a decree against the debtor automatically (known as a 'decree in absence'). For more detailed information on court procedures, read Small claims court in Scotland.
What if the debtor disagrees with the decree or needs time to pay?
If a decree has already been issued, there may still be options, but they are time-sensitive.
Disputing the decision
If the debtor disagrees with the court's decision, they can sometimes appeal to the Sheriff Appeal Court. There are usually only 14 days to do this. There's a fee for appealing, although legal aid might be available for simple procedure cases. If the appeal fails, the decree will be recorded.
Asking for time to pay
If the debtor admits the money is owed but can't pay it all at once, they can ask for time to pay. It's best to do this when first responding to the claim.
However, even if a decree has been granted (and it's for less than £5,000), it's still possible to apply for time to pay. If the court grants this, the creditor who holds the decree cannot take further enforcement action against the debtor, as long as the debtor, as long as the debtor sticks to the agreed payment plan.
How is a decree removed from a credit file and the Registry Trust?
A decree will automatically be removed from an individual's credit file after six years from the original judgment date.
If the debt is paid after one month from the decree date, the decree remains on the file for the full six years. However, it will be marked as 'satisfied' once the Registry Trust is notified. Proof of payment will need to be sent to the Registry Trust to update the records.
The only way to have a decree completely removed from the Register before the six years are up is if the decree was:
-
paid in full within one calendar month of the decree date
-
recalled by the court (eg it was successfully appealed)
-
entered in error
It's important to get legal advice on any specific situation involving a court claim or decree. Do not hesitate to Ask a lawyer if you have any questions.
