Asking the court for time to pay

Time to pay lets you ask a Scottish court to allow you to pay a debt by instalments, or as a lump sum at a later date, instead of facing enforcement. If you ask during the court case, it is called a time to pay direction. If you ask after a charge for payment has been served or an arrestment made, it is a time to pay order. mygov.scot says it is available for most debts under £25,000, and you can only get it once for the same debt.

What is the difference between a direction and an order?

Both work in a similar way. The court will grant time to pay if it is satisfied that it is reasonable in all the circumstances, looking in particular at:

• the nature of and reasons for the debt
• anything the creditor has done to help you pay
• your financial position
• how reasonable your offer is
• how reasonable any objection from the creditor is

A time to pay order can be made for a court decree, a summary warrant (such as for council tax), a document registered for enforcement, or a judgment from elsewhere in the UK that has been registered in Scotland.

Which debts can get time to pay?

The £25,000 limit

The Debtors (Scotland) Act 1987 says time to pay cannot be granted where the debt is more than £10,000 or such amount as may be prescribed in regulations. Regulations made in 2000 raised that amount to £25,000 from 10 July 2000, which is why mygov.scot gives £25,000. For a direction, the limit applies to the sum in the decree, not counting interest and expenses. For an order, it applies to the amount outstanding when you apply, not counting interest.

Debts that are excluded

Time to pay is not available for:

• money owed to HMRC or Revenue Scotland, which mygov.scot says includes income tax and VAT
• maintenance, and child support liability orders
• a capital sum awarded on divorce
• car tax

mygov.scot also says different rules apply to rent and mortgage arrears. For debts under the Consumer Credit Act, such as credit cards and hire purchase, there is a separate ‘time order’ under that Act. If one has been made for a debt, time to pay under the 1987 Act is no longer possible.

Other limits

• Only individuals can get time to pay, not companies.
• Only once per debt. You cannot get a time to pay order if you have already had a direction or order for that debt, whether or not it is still in effect.
• Not once some enforcement is well advanced. For example, if belongings have been attached and notice of an auction given, an order cannot be made until that diligence is finished or ends.
• Bank arrestments. An order is only possible if fewer than 8 weeks of the 14-week period before frozen money is released have passed.

How do you apply?

• In a simple procedure claim: send a Time to Pay Application (Form 5A) to the court by the last date for a response. The claimant can consent or object, and the sheriff decides. The rules also let you apply after the sheriff has made a decision. See what to do if you receive a simple procedure claim.
• After a decree: ask your local sheriff court for the application form. The application goes to the sheriff court that granted the decree, or otherwise the sheriff court for where you live. The sheriff clerk has a duty to help you fill in the form, in line with the offer you want to make.
• For a summary warrant: use the form that came with the warrant. mygov.scot says it cannot be downloaded, so contact the sheriff officers’ firm if you have lost it.
• In the Court of Session: a different form is used, and mygov.scot recommends getting professional advice.

Your offer should be one you can keep up. Work out your income, essential spending and other debts first, and include details of anyone who depends on you. A money adviser can help you do this at no cost.

What does time to pay do to arrestments and other diligence?

When a proper application for a time to pay order is received, the sheriff makes an interim order that pauses some enforcement while the application is decided. For example, a new earnings arrestment cannot be served and frozen bank money cannot be released to the creditor.

While a time to pay order is in effect, the creditor cannot serve a charge for payment or start arrestments, earnings arrestments, attachments and several other kinds of diligence for that debt. When the order is made:

• Earnings arrestment: the sheriff must recall any existing earnings arrestment for the debt. See how to stop a wage arrestment.
• Bank arrestment: the sheriff may recall or restrict it. If they do not, the frozen money cannot be released to the creditor while the order is in effect.
• Attachment: the sheriff may recall it, or order that no further steps are taken.
• Inhibition: this is not on the list. mygov.scot says a creditor can still apply for an inhibition, which stops you selling or borrowing against your home, even if you have time to pay.

Interest is not simply added to your instalments. The creditor can claim interest due under the decree by serving a notice on you, and your payments go towards the main debt before any interest claimed.

What happens if you miss a payment?

The 1987 Act says a time to pay direction or order stops having effect if:

• on the day an instalment falls due, you still owe at least two earlier instalments
• any of the debt is still unpaid 3 weeks after the last instalment was due
• for a lump sum, it is still unpaid 24 hours after the date set

The creditor can then enforce whatever is still owed. mygov.scot warns that if the arrangement is cancelled because you missed payments, you cannot apply for time to pay for the same debt again.

If your circumstances change, you or the creditor can ask the sheriff to vary the order, for example to lower the instalments. mygov.scot says to ask your local sheriff court for the form. Do this before you fall behind.

Is time to pay the right option?

Time to pay deals with one debt at a time. If you have several debts, keeping up separate arrangements can be hard, and because you only get one chance per debt, a missed payment can leave you with nothing to fall back on.

Formal options deal with debts together. For example, once a Debt Arrangement Scheme programme is approved, creditors cannot use diligence for the debts in it, and a time to pay order for one of those debts is in effect recalled. You cannot apply for DAS if your only debt is already covered by time to pay. A trust deed and sequestration are other options, each with costs and consequences. An adviser needs to look at your full situation before you choose.

Official sources

• Debtors (Scotland) Act 1987, sections 1 to 15 (time to pay directions and orders)
• Debtors (Scotland) Act 1987 (Amendment) Regulations 2000 (raising the limit to £25,000)
• mygov.scot: asking the court for time to pay a debt
• mygov.scot: how to apply for time to pay
• Act of Sederunt (Simple Procedure) 2016, Schedule 1, Part 5 (how to ask for time to pay)