PART I EXTENSION OF TIME TO PAY DEBTS
Time to pay orders following charge or diligence
5 Time to pay orders.
1
Subject to section 14 of this Act, this section applies to a debtdue under a decree or other document in respect of which —
a
a charge for payment has been served on the debtor;
b
an arrestment has been executed; or
c
an action of adjudication for debt has been commenced.
2
Subject to subsections (4) and (5) below, the sheriff F57or the First-tier TribunalF17, on an application by the debtor, shall, if satisfied that it is reasonable in all the circumstances to do so, and having regard in particular to the matters mentioned in subsection (2A) below, make an order that a debt to which this section applies (including any interest claimed in pursuance of subsections (6) and (7) below) so far as outstanding, shall be paid—
a
by such instalments, commencing at such time after the date of intimation in accordance with section 7(4) of this Act F58... to the debtor of the order under this subsection, payable at such intervals; or
b
as a lump sum at the end of such period following intimation as mentioned in paragraph (a) above,
as the sheriff may specify in the order.
F182A
The matters referred to in subsection (2) above are—
a
the nature of and reasons for the debt in relation to which the order is sought;
b
any action taken by the creditor to assist the debtor in paying that debt;
c
the debtor's financial position;
d
the reasonableness of any proposal by the debtor to pay that debt; and
e
the reasonableness of the objection by the creditor to the offer by the debtor to pay that debt.
3
An order under subsection (2) above shall be known as a “time to pay order”.
4
It shall not be competent for the sheriff F56or the First-tier Tribunal to make a time to pay order—
a
where the amount of the debt outstanding at the date of the making of the application under subsection (2) above (exclusive of any interest) exceeds £10,000 or such amount as may be prescribed in regulations made by the Lord Advocate;
b
where, in relation to the debt, a time to pay direction or a time to pay order has previously been made (whether such direction or order is in effect or not);
F19c
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
d
F54da
in relation to a debt including any sum recoverable by or on behalf of Revenue Scotland under or by virtue of the Revenue Scotland and Tax Powers Act 2014 (asp 16) or any other enactment in respect of a devolved tax, under a contract settlement or under a settlement agreement,
F20e
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
Where in respect of a debt to which this section applies—
a
F44there has been a poinding of articles belonging to the debtor and a warrant of sale has been granted in respect of them but has not been executed;
F44articles belonging to the debtor have been attached and notice of an auction given under section 27(4) of the Debt Arrangement and Attachment (Scotland) Act 2002 (asp 17) but no auction has yet taken place;
aa
money owned by the debtor has been attached and removed;
b
moveable property of the debtor has been arrested and in respect of the arrested property—
i
a decree in an action of furthcoming has been granted but has not been enforced; or
ii
a warrant of sale has been granted but the warrant has not been executed; or
c
F47a decree in an action of adjudication for debt has been granted and the creditor has, with the debtor’s consent or acquiescence, entered into possession of any property adjudged by the decree or has obtained a decree of maills and duties, or a decree of removing or ejection, in relation to any such property,
F47land owned by the debtor has been attached and an order under section 97(2) of the Bankruptcy and Diligence etc. (Scotland) Act 2007 (asp 3) (in this Part, the “2007 Act”) granting warrant for sale of the land has been made but that warrant has not yet been executed; or
d
property owned by the debtor has been attached by residual attachment and a satisfaction order under section 136(2) of the 2007 Act has been made but not yet executed,
it shall not be competent for the sheriff F59or the First-tier Tribunal to make a time to pay order in respect of that debt until the diligence has been completed or has otherwise ceased to have effect.
F435A
Where, in respect of a debt to which this section applies, an arrestment such as is mentioned in subsection (1) of section 73J of this Act has been executed, the sheriff F60or the First-tier Tribunal may make a time to pay order in respect of that debt only if less than 8 weeks of the period mentioned in subsection (3) of that section have expired.
6
Without prejudice to section 9(12) of this Act, interest payable under a decree for payment of a debt in respect of which a time to pay order has been made (other than interest awarded as a specific sum in the decree) shall not be recoverable by the creditor except in accordance with subsection (7) below.
7
A creditor who wishes to recover interest to which subsection (6) above applies shall serve a notice on the debtor not later than the date prescribed by Act of Sederunt F61or by rules made under section 68 or paragraph 4 of schedule 9 of the Tribunals (Scotland) Act 2014 occurring—
a
in the case of an order under subsection (2)(a) above, before the date when the last instalment of the debt (other than such interest) is payable under the order;
b
in the case of an order under subsection (2)(b) above, before the end of the period specified in the order,
stating that he is claiming such interest and specifying the amount of the interest claimed.
8
Any sum paid by a debtor under a time to pay order shall not be ascribed to interest claimed in pursuance of subsections (6) and (7) above until the debt concerned (other than such interest) has been discharged.
F458A
In paragraph (d) of subsection (4) above, “contract settlement” means an agreement made in connection with any person's liability to make a payment to the Commissioners for Her Majesty's Revenue and Customs under or by virtue of any enactment.
F538B
In paragraph (da) of subsection (4)—
“contract settlement” means any agreement made in connection with any person's liability to make a payment to Revenue Scotland under or by virtue of the Revenue Scotland and Tax Powers Act 2014 (asp 16) or any other enactment in respect of a devolved tax,
“devolved tax” has the meaning given by section 80A(4) of the Scotland Act 2012 (c. 46),
“settlement agreement” has the meaning given by section 246(1) of the Revenue Scotland and Tax Powers Act 2014 (asp 16).
F219
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6 Application for time to pay order.
1
An application for a time to pay order shall specify, to the best of the debtor’s knowledge, the amount of the debt outstanding as at the date of the making of the application and shall include an offer to pay it—
a
by specified instalments, payable at specified intervals; or
b
as a lump sum at the end of a specified period.
2
The F64... duty under section 96(2)(b) of this Act F65on the sheriff clerk or, in relation to time to pay directions made by the First-tier Tribunal, a member of administration staff of the First-tier Tribunal to assist the debtor in the completion of certain forms shall, in relation to a form of application for a time to pay order, consist of a duty to assist him in the completion of the form in accordance with proposals for payment made by the debtor.
3
On receipt of an application for a time to pay order, the sheriff F68or the First-tier Tribunal shall, if the application is properly made and unless it appears F66...that the making of a time to pay order would not be competent, make an interim order sisting diligence as provided for in section 8(1) of this Act.
4
The sheriff may F68or the First-tier Tribunal, where the debtor is unable to furnish the necessary information, make an order requiring the creditor, within such period as may be specified therein, to furnish to the sheriff F68or the First-tier Tribunal such particulars of the decree or other document under which the debt is payable as may be prescribed by Act of Sederunt F67or rules made under section 68 or paragraph 4 of schedule 9 of the Tribunals (Scotland) Act 2014.
5
If a creditor fails to comply with an order under subsection (4) above the sheriff F68or the First-tier Tribunal may, after giving the creditor an opportunity to make representations, make an order recalling or extinguishing any existing diligence, and interdicting the creditor from executing diligence, for the recovery of the debt.
6
Where the sheriff F62or the First-tier Tribunal makes an interim order under subsection (3) above, the sheriff clerk F63or, in relation to time to pay directions made by the First-tier Tribunal, a member of administration staff of the First-tier Tribunal shall as soon as is reasonably practicable—
a
serve a copy of the application for the time to pay order on the creditor informing him that he may object to the granting of the application within a period of 14 days after the date of service;
F35b
serve on—
i
the creditor; and
ii
where an arrestment such as is mentioned in section 73J(1) of this Act is in effect, the arrestee,
a copy of the interim order; and
c
serve on the creditor a copy of any order under subsection (4) above.
7 Disposal of application.
1
If no objection is made in pursuance of section 6(6)(a) of this Act, the sheriff F72or the First-tier Tribunal shall make a time to pay order in accordance with the application.
2
If such an objection is made, the sheriff F72or the First-tier Tribunal shall not dispose of the application without first—
a
giving the debtor an opportunity to make representations; and
b
if agreement is not reached as to whether a time to pay order should be made or as to its terms, giving the parties an opportunity to be heard.
3
Where the sheriff F72or the First-tier Tribunal refuses to make a time to pay order, he shall recall any interim order under section 6(3) of this Act.
4
The sheriff clerk F70or, in relation to time to pay directions made by the First-tier Tribunal, a member of administration staff of the First-tier Tribunal shall as soon as is reasonably practicable—
a
intimate the decision of the sheriff F69or the First-tier Tribunal on an application for a time to pay order (including any recall of an interim order under subsection (3) above) to the debtor F36, the creditor and, where an arrestment such as is mentioned in section 73J(1) of this Act is in effect, the arrestee; and
b
if the sheriff F71or the First-tier Tribunal has made a time to pay order, inform the creditor of the date when he intimated that fact to the debtor.
8 Effect of interim order on diligence.
1
While an interim order under section 6(3) of this Act is in effect it shall not be competent in respect of the debt—
F22za
to attach in execution of the decree any articles which have been attached by interim attachment;
F2a
to F38give, in relation to any articles which have been attached, notice of an auction under section 27(4) of the Debt Arrangement and Attachment (Scotland) Act 2002 (asp 17);
F51aa
to execute a money attachment;
b
to execute an earnings arrestment;
c
F39subject to subsection (1A) below, where an arrestment of property belonging to the debtor (other than an arrestment of earnings in the hands of his employer) has been executed before or after the making of the interim order, to commence an action of furthcoming or sale, or to grant decree in any such action which has already been commenced, in pursuance of that arrestment;
d
to commence an action of adjudication for debt or, if such an action has already been commenced, to take any steps other than the registration of a notice of litigiosity in connection with the action, the obtaining and extracting of a decree in the action, the registration of an abbreviate of adjudication and the completion of title to property adjudged by the decree.
F371A
Where the arrestment mentioned in subsection (1)(c) above is an arrestment such as is mentioned in subsection (1) of section 73J of this Act, while the interim order is in effect—
a
it shall not be competent to release funds under subsection (2) of that section; and
b
the period during which the order is in effect shall be disregarded for the purposes of determining whether the period mentioned in subsection (3) of that section has expired.
1B
Where, before the interim order is made—
a
a notice of land attachment is registered, it shall not be competent to take any steps other than—
i
serving, under subsection (5) of section 83 of the 2007 Act, a copy of that notice; and
ii
registering, under subsection (6) of that section, a certificate of service; or
b
a land attachment is created, it shall not be competent to make, under section 97(2) of the 2007 Act, an order granting a warrant for sale of the attached land.
1C
Where, before the interim order is made, a residual attachment order has been made, it shall not be competent—
a
to take any steps other than serving, under section 133(1) of the 2007 Act, a schedule of residual attachment; or
b
to make, under section 136(2) of the 2007 Act, a satisfaction order.
2
An interim order under section 6(3) of this Act shall come into effect on intimation to the creditor under section 6(6)(b) of this Act and shall remain in effect until intimation of the sheriff’s F73or the First-tier Tribunal’s decision on the application for a time to pay order is made to the debtor and the creditor under section 7(4)(a) of this Act.
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9 Effect of time to pay order on diligence.
1
While a time to pay order is in effect, it shall not be competent—
a
to serve a charge for payment; or
2
On making a time to pay order, the sheriff in respect of the debt—
a
shall make an order recalling any existing earnings arrestment;
b
where the debt is being enforced by a conjoined arrestment order, shall—
i
if he, or another sheriff sitting in the same sheriff court, made the conjoined arrestment order, vary it so as to exclude the debt or, where no other debt or maintenance is being enforced by the order, recall the order;
ii
if a sheriff sitting in another sheriff court made the conjoined arrestment order, require intimation of the time to pay order to be made to a sheriff sitting there who shall so vary or, as the case may be, recall the conjoined arrestment order;
c
F24where an action of adjudication for debt has been commenced, shall make an order prohibiting the taking of any steps other than the registration of a notice of litigiosity in connection with the action, the obtaining and extracting of a decree in the action, the registration of an abbreviate of adjudication and the completion of title to property adjudged by the decree;
F24where a notice of land attachment has been registered under section 83(1)(c) of the 2007 Act, shall make an order prohibiting the taking of any steps other than—
i
the serving, under subsection (5) of that section, of a copy of the notice; and
ii
the registration, under subsection (6) of that section, of a certificate of service;
ca
where a residual attachment order has been made under section 132(2) of the 2007 Act, shall make an order prohibiting the taking of any steps other than the serving, under section 133(1) of the 2007 Act, of a schedule of residual attachment;
cb
may make an order recalling an interim attachment;
d
may make an order recalling F4an attachment;
e
may make an order recalling or restricting any arrestment other than an arrestment of the debtor’s earnings in the hands of his employer.
F742A
On making a time to pay order, the First-tier Tribunal in respect of the debt—
a
must make an order recalling any existing earnings arrestment,
b
where the debt is being enforced by a conjoined arrestment order, must—
i
if the First-tier Tribunal Housing and Property Chamber made the conjoined arrestment order, vary it so as to exclude the debt or, where no other debt or maintenance is being enforced by the order, recall the order,
ii
if either—
aa
another Chamber of the First-tier Tribunal, or
bb
a sheriff sitting in the sheriff court,
made the conjoined arrestment order, require intimation of the time to pay order to be made to the other Chamber or to the sheriff who must so vary or, as the case may be, recall the conjoined arrestment order,
c
where a notice of land attachment has been registered under section 83(1)(c) of the 2007 Act, must make an order prohibiting the taking of any steps other than—
i
the serving, under subsection (5) of that section, of a copy of the notice, and
ii
the registration, under subsection (6) of that section, of a certificate of service,
d
where a residual attachment order has been made under section 132(2) of the 2007 Act, must make an order prohibiting the taking of any steps other than the serving, under section 133(1) of the 2007 Act, of a schedule of residual attachment,
e
may make an order recalling an interim attachment,
f
may make an order recalling an attachment,
g
may make an order recalling or restricting any arrestment other than an arrestment of the debtor’s earnings in the hands of the debtor’s employer.
3
If F25an interim attachment,F5an attachment or such an arrestment as is mentioned in subsection (2)(e) above is in effect, the sheriff F75or the First-tier Tribunal may order that the making of a time to pay orderF26, the recall of the interim attachment orF6the attachment or the recall or restriction of the arrestment shall be subject to the fulfilment by the debtor of such conditions as the sheriff F75or the First-tier Tribunal thinks fit.
4
F41Subject to subsection (4A) below, where the sheriff F76or the First-tier Tribunal does not exercise the powers conferred F77... by subsection F27(2)(cb), (d) or (e) above to recall a diligence, F78the sheriff or the First-tier Tribunal shall order that no further steps shall be taken by the creditor in the diligence concerned other than, in the case of F7an attachment, making a report of attachment under section 17 of the Debt Arrangement and Attachment (Scotland) Act 2002 (asp 17) or applying for an order under section 20(1) of that Act.
F404A
Where, in relation to an arrestment such as is mentioned in subsection (1) of section 73J of this Act, the sheriff F79or the First-tier Tribunal does not exercise the power conferred F80... by subsection (2)(e) above to recall that arrestment, F81the sheriff or that tribunal shall make an order—
a
prohibiting, while the time to pay order is in effect, the release of funds under subsection (2) of section 73J of this Act; and
b
providing that the period during which the time to pay order is in effect shall be disregarded for the purposes of determining whether the period mentioned in subsection (3) of that section has expired.
5
Any order made under subsection (2) or (4) above shall specify the diligence in relation to which it is made.
6
7
The sheriff clerk F83or, in relation to time to pay directions made by the First-tier Tribunal, a member of administration staff of the First-tier Tribunal shall, at the same time as F84intimation is made under section 7(4)(a) of this Act—
a
intimate any order under subsection (2) or (4) above to the debtor and the creditor and the order shall come into effect on such intimation being made to the creditor;
b
intimate any order under subsection (2)(a) or (b) above to the employerF42; and
c
where any order under subsection (4A) above is made in relation to an arrestment such as is mentioned in section 73J(1) of this Act is in effect, intimate that order to the arrestee.
8
While an order under subsection (4) above is in effect it shall not be competent F29...—
F30a
to sell articles which have been attached (other than by virtue of section 20(1) or 22(3) of the Debt Arrangement and Attachment (Scotland) Act (asp 17);
b
F31to grant a decree of furthcoming or sale of arrested property.
9
10
Where, before the making of a time to pay order in respect of a debt, a charge to pay that debt has been served—
a
if the period for payment specified in the charge has not expired, the charge shall lapse on the making of the order;
b
if that period has expired, nothing in the time to pay order nor in any order under this section shall affect retrospectively the effect of the charge in the constitution of apparent insolvency within the meaning of section F5516 of the Bankruptcy (Scotland) Act 2016.
11
If, when a time to pay order in relation to a debt is made, any diligence enforcing it is in effect which is not specified in an order under subsection (2) or (4) above, the diligence shall remain in effect unless and until it is recalled under section 10(4) of this Act.
12
Where a time to pay order is recalled or ceases to have effect, otherwise than—
a
under section 12(2)(a) of this Act; or
b
by the debt payable under the order being paid or otherwise extinguished,
the debt in so far as it remains outstanding (including interest thereon, whether or not awarded as a specific sum in the decree) shall, subject to any enactment or rule of law to the contrary, become enforceable by any diligence mentioned in subsection (1)(b) above; and, notwithstanding section F1025 of the Debt Arrangement and Attachment (Scotland) Act 2002 (asp 17), in this subsection “diligence” includes, where the debt was, immediately before the time to pay order was made, being enforced by F11an attachment in any premises, F12another attachment in those premises.
10 Variation and recall of time to pay order and arrestment.
1
The sheriff F85or the First-tier Tribunal may, on an application by the debtor or the creditor—
a
2
If F34an interim attachment,F15an attachment or an arrestment in respect of the debt is in effect, the sheriff F86or the First-tier Tribunal may order that any variation, recall or restriction under subsection (1) above shall be subject to the fulfilment by the debtor of such conditions as the sheriff F86or the First-tier Tribunal thinks fit.
3
The sheriff clerk F89or, in relation to time to pay directions made by the First-tier Tribunal, a member of administration staff of the First-tier Tribunal shall as soon as is reasonably practicable intimate a variation under subsection (1) above to the debtor and to the creditor, and the variation shall come into effect on the date of such intimation.
4
Where, after a time to pay order has been made, it comes to the knowledge of the sheriff F88or the First-tier Tribunal that the debt to which the order applies is being enforced by any of the diligences mentioned in section 9(1)(b) of this Act which was in effect when the time to pay order was made, the sheriff F88or the First-tier Tribunal, after giving all interested parties an opportunity to be heard, may make—
a
an order recalling the time to pay order; or
b
any of the orders mentioned in subsection (2) or (4) of section 9 of this Act; and that section shall, subject to any necessary modifications, apply for the purposes of an order made under this paragraph as it applies for the purposes of an order made under either of those subsections.
11 Lapse of time to pay order.
1
If, on the day on which an instalment payable under a time to pay order becomes due, there remains unpaid a sum, due under previous instalments, of not less than the aggregate of 2 instalments, the order shall cease to have effect.
2
If at the end of the period of 3 weeks immediately following the day on which the last instalment payable under a time to pay order becomes due, any part of the debt payable under the order remains outstanding, the order shall cease to have effect.
3
If any sum payable under a time to pay order under section 5(2)(b) of this Act remains unpaid 24 hours after the end of the period specified in the order, the order shall cease to have effect.