Going to Court for Debts

When creditors want to take you to Court in Scotland, they must use certain procedures.

What these procedures are will depend on what type of debt it is they are taking you to court for.

For example, if you are being taking to court for Council Tax debt, the process is known as the Summary Warrant procedure.  It is a different procedure to the procedure that is used if a credit card company wants to take you to court.  Equally the procedure is different if the debt relates to rent or mortgage arrears.

Some creditors don’t even need to take you to Court, because they are able to use a special procure known as Summary Diligence to recover a debt.

Below we look at the main types of debts that you may be taken to Court for and what the procedures for doing so are.

Some creditors don’t even need to take you to Court, because they are able to use a special procure known as Summary Diligence to recover a debt.

Below we look at the main types of debts that you may be taken to Court for and what the procedures for doing so are.

Consumer Credit Debts

Consumer credit debts are any debt that is regulated by the Consumer Credit Act 1974. This can be a personal loan, a credit card, store card or even a hire purchase/PCP agreement.

When a consumer credit lender wants to take you to Court, they must first follow a certain procedure.

First, normally, you must have missed two installments under the agreement. At that point the lender then must serve on you a Notice of Arrears.

After they have served on you a Notice of Arrears, they must then serve on you a Default Notice.

The Default Notice gives you a minimum of 14 days to remedy the default (missed payments). If you fail to remedy the default within the specified period, the firm can then terminate the agreement and demand full payment of the debt.

It is this calling up of the debt that then allows the firm to take you to Court.

If they have not taken these steps, they cannot raise a court action against you. Their failure to do so can be used as a defence in any action raised in Court.

The action they raise will be an action for payment of money (and sometimes also return of goods, where the agreement is a hire purchase agreement).

They raise this action in your local Sheriff Court.

Some firms may try and say they are going to raise the action in the County Courts in England, but if they do this you should seek advice and bring to the attention of the lender that the Financial Conduct Authority would expect them to raise any court proceedings in your local Sheriff Court.

When they raise the action in the Sheriff Court, they will either do so using the:

  • Simple Procedure (where the sum sought is under £5,000);or
  • Ordinary Procedure (where the sum they seek is over £5,000).

Council Tax Arrears/HMRC Debts

When a local authority or the HMRC takes you to court, they use the Summary Warrant Procedure. Although this does involve the Courts, it does not involve a court hearing.

You will receive a Final Demand from the Council before they apply for a Summary Warrant (a type of court order), but you won’t be called to Court before it is granted.

Rent Arrears

Where you owe rent arrears, the procedure used will depend on what type of tenant you are. 

If you are a private sector tenant, the landlord does not take you to the Sheriff Court, but rather the First-tier Tribunal for Scotland (Housing and Property Chamber)

Where your landlord is a local authority or a Registered Social Landlord (Housing Association), the action raised against you is in the Sheriff Court, using a procedure known as Summary Cause.

When an action is raised for rent arrears, it is normally accompanied by a second action for ejection of you from the property.

Before a landlord initiates action to have you evicted for rent arrears, they have to notify your local authority that you may be at risk of homelessness, as they intend to repossess your property.

Mortgage and Secured Loan Arrears

When you have mortgage arrears and a lender want to repossess your home, they must do so by taking you to Court.  They do this first by making a Summary Application under the Ordinary Cause rules of the Sheriff Court.

However, before they do this, they must follow a strict procedure that involves serving on you a default notice; they may also serve you a calling up notice.

They will also have to demonstrate that they have met several pre-action requirements before they raise their Court action and notify your local authority that you may be at risk of homelessness, as they intend to repossess your property.

Other Debts

You could also be taken to court for several other types of debt, that may not be of the type listed above. This could include damages for breach of contract, personal injury or damage to property claims.

The general rule is if it is for an amount under £5,000, then it will be raised in the Sheriff Court using Simple Procedure; and if it is for over £5,000, but under £100,000, it will be raised in the Sheriff Court using Ordinary Cause Procedure.

Where the amount being sued for is over £100,000 it is up to the person raising the action to decide whether they want to raise it in the Sheriff Court or the Court of Session.

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