Charge for Payment

Charge for Payments

A Charge for Payment is a  legal documents that is served in Scotland by Sheriff Officers and Messenger at Arms. They are served to formally demand payment of money and give only 14 days to make payment.  If the Charge is not complied with there are consequences.

When can a Charge for Payment be Served?

If a creditor raises a court action for payment of money and is successful in getting a court order (also known as a decree), then they can serve a Charge for Payment to demand full payment of the money.  First, however, they must extract the decree from the court, which they cannot do until 14 days have passed. This is to allow the consumer to appeal the decision if they choose.  If there is no appeal the extract decree can then be take to a Sheriff Officer or Messenger at Arms to be served on the consumer.
They then have 14 days to pay the debt in full. If they fail to make the payment, the creditor can then instruct the Sheriff Officers or Messenger at Arms to take further action. This includes executing:

an earning arrestment;
a bank account arrestment  (a Charge is only required where a summary warrant has been used); or
an attachment of property held outside the debtor’s home, including an attachment of a vehicle;

A Charge for Payment doesn't need to be served to execute an inhibition.

Summary Warrants

A Charge for Payment does not need to be served to execute a bank account arrestment, unless the debt is being recovered for council tax arrears or tax debts owed by HMRC using a Summary Warrant.

Summary Diligence

For certain types of debts, it is not necessary for the creditor to raise a court action before they serve a Charge for Payment. This is possible for debts which are not regulated by the Consumer Credit Act (such as credit cards and bank loans) using a procedure known as summary diligence.

To use the summary diligence procedure, the debtor must explicitly consent to the procedure being used when they take out the debt and it is most commonly used for debts which have been taken out when someone is acting in the course of a business, or where the debt is for a landlord’s guarantee or for a credit union loan.

The summary diligence procedure allows a creditor to register a debt for preservation and execution with the courts, most commonly in the Books of Council and Session. When the creditor believes the debtor has defaulted on the agreement they can extract the registered debt from the Books and deliver it to a Sheriff Officer or Messenger at Arms and instruct them to serve the Charge for Payment. Where the debtor disputes that they were in default, they can challenge the competency of the Charge, by applying for it to be suspended and reduced, whilst interdicting the creditor from taking any further enforcement action on the strength of it. This, however, is a complicated and legal advice should be sought from a solicitor.

Apparent Insolvency and Bankruptcy

A Charge for Payment is also an important document legally, as once it expires, it makes the debtor apparently insolvent.  This is a legal term, but importantly means the creditor (or indeed another creditor) can raise a petition for the sequestration (bankruptcy) of the debtor, providing the other conditions for making someone bankrupt have also been met. To use an expired Charge for Payment to sequestrate a debtor, the creditor must do so within 4 months of the Charge expiring.

Although to sequestrate a debtor a creditor must show £3,000 or more is owed by the debtor, it is not necessary for the debt contained in the Charge for Payment to be more than £3,000. The expired Charge proves apparent insolvency. Providing the creditor can show in total, including what is owed in other debts, is more than £3,000, the Charge can be relied upon in any bankruptcy petition.

How to Prevent a Charge for Payment being Served

If it is feared a creditor may serve a charge for payment, there are certain steps that can be taken to prevent them from doing so.  First, a statutory moratorium can be registered with the Accountant in Bankruptcy office, providing one has not already been registered within the last 12 months. This prevents creditors from taking any further enforcement action for a period of six weeks. This is a free process and can be done relatively quickly. Statutory moratoriums’, however, only allow some breathing space and it is incumbent on the debtor to obtain advice to find a more long-term solution.

Alternatively, where a court action has been raised, a Time to Pay Direction can be applied for before the court grants decree. If this is allowed by the court, it allows the debtor to enter an installment plan with the creditor and prevent them taking any further action, whilst it is being maintained.

How to Stop a Charge for Payment being used after it is Served

Again, a statutory moratorium can be used, even after a Charge for Payment has been served and has expired. Again, this is only possible if it has not already been used in the past 12 months and only allows six weeks breathing space to allow for a more permanent solution to be found.

Alternatively, even after a court order has been awarded, or a summary warrant granted, the debtor can apply for a time to pay order, which again, allows the debtor to enter an installment plan with the creditor and providing it is maintained, will prevent a Charge for Payment being relied upon for any further action.

Can the Debt Arrangement Scheme be used to stop a Charge for Payment?

The Debt Arrangement Scheme (DAS) as a remedy, can be used to stop a Charge for Payment being served. As soon as an application has been made,  no Charge can be served for any debt that is included in the DAS. If the DAS is approved, the protection continues.

Comments

  1. Kirsty

    Hi.

    Rec’d a letter about not paying council tax. I called and set up payment plan with Scott and Co. they said this will stop it going further is this the case.

    1. Scottish Adviser Post author

      Hi Kirsty

      I think you have to take them at their word, now you have an agreement in place, but you cannot afford to miss any payments.

      You also have to make sure you have a payment in place for your current Council Tax Bill that becomes due in April.

      If you don’t, you debt will just become worse.

      If what you have agreed wont allow you to pay both at the same time, ask they reduce what you are paying towards your arrears at that time, so you can pay your current bill.

      If they are not helpful, contact your local Ciitizen Advice Bureaux or local authority money advice service for help to renegotiate your current agreement.

  2. Euan

    Hi.
    I’ve recieved a not unexpected charge for payment. I can pay it within the 14days (was waiting for funds to come through) . Is there anyway of avoiding the fee for the messenger at arms or do I just have to take that one on the chin?.
    Thanks in advance

  3. Cara

    Hi

    I have had a charge of payment from sheriff officers for my council tax

    Before this though I just phoned up and made a direct debit for them to take a monthly payment? But I knew I was still getting the sheriff Officer letter.

    Do I need to do anything with the sheriff Officer letter, even though I’ve got a direct debit set up?

    1. Scottish Adviser Post author

      Hi Cara

      It doesn’t sound to me like you need to do anything else if you have entered an agreement with them.

      For your own piece of mind you may want to confirm with them now you have received the Charge for Payment that no further action will be taken if you stick to the agreement.

      The significance of the Charge is after the 14 days expires, if you miss any payments they can move immediately for a wage arrestment or a bank account arrestment.

      The only way to avoid this is to “formalise” your agreement by applying for a “Time to Pay” which protects you and means they cannot take action until you go into arrears of 3 months.

      You should seek advice if you want to do that first from your local Citizen Advice Bureau of Local Authority Money Advice Service.

  4. Cara

    Hi

    I have set up a payment plan with Scott and co but I still got served with a charge of payment from sheriff officers

    I had told the guy on the phone I have a direct debit sorted ? But do I need to do anything else with the letter I got sent it gave me 14 day’s to pay in full but I don’t have that sort of money Even when I set up a direct debit ?

    Thanks

  5. Jane

    Hi Alan

    When I rented my house I didn’t realise I had to put the deposit into a scheme and after I gave my tennant notice he lodge a complaint and was awarded a first Tier Tribunal decision where they held I should pay him 3 times his deposit amount.

    I have no funds to pay this all at once.

    I have now been served with a payment notice from sheriff officer and told I have to pay it all in 14 days. I don’t have the money to pay it all at once.

    I would like to set up a payment plan but don’t know who to contact to do this.

    Im also worried they arrest my wages or take my car or furniture from my home which I share with my daughters.

    Can you give me advise what I should do.

    1. Scottish Adviser Post author

      Hi Jane

      I am sorry about this.

      Renting your home can be complicated, especially if you are not a professional landlord.

      If you are letting it again you may wish to speak to a letting agent, who can manage all the legal issues for you for a fee.

      You can also visit the Shelter Scotland website that provides lots of helpful information or the Rights and Obligations of Private Residential Landlords.

      In terms of dealing with this debt the person to deal with is the Sheriff Officers.

      If they won’t accept a repayment plan, you can visit your local Citizen Advice Bureau or Local Authority Money Advice service and they can help you negotiate with them and will also take a holistic look at all your debts.

      One option may be to apply for a Time to Pay Order under the Debtors (Scotland) Act 1987 which allows you to apply to the Court for time to pay once a Charge for Payment has been served.

      As a rule of thumb the shorter the time you propose to repay the debt the more chance of success you have. It can be objected to and if it is objected to a hearing in front of a Sheriff may be necessary, but if it is approved, it stops all further Sheriff Officer action.

      If you have multiple other debts, there may be a more suitable option, so that is why you are best seeking advice before you do anything formal.

  6. Louise

    Hi Alan,

    I received a Charge for Payment this morning in regards to some Council Tax arrears.

    The arrears were being paid from my benefit, and under 2 months ago I applied for Universal Credit, which I believe stopped the payments direct from my benefit to my arrears.

    I have not had any Summary Warrants, letters from the council or Scott & Co prior to this morning’s sheriff officer visit.

    From reading your website, it seems that they must go to court prior to the Charge For Payment can be sent and that I must be afforded 14 days to appeal this. I have received no notification of this going to court or having 14 days to appeal it?

    I want to pay this in instalments and I am not happy about the extortionate sheriff officer charge that was added on, as I was never told about this in the first place, or I would have dealt with it immediately. Is the only way to solve this by applying for a ‘Time to Pay Direction’ through the court? Does this stop any proceedings until it has been either granted or denied by the court?

    Finally, can the sheriff officer fee for attending my property be appealed?

    Thanks!

    1. Scottish Adviser Post author

      Hi Louise

      I am sorry to hear this. I believe what has happened is when you benefits switched, the deduction for council tax arrears didn’t switch also.

      The first thing I would do is contact your Local Council and ask they set up a deduction for your Council Tax Arrears from your Universal Credit and ask they take no further action.

      In terms of the Summary Warrant this will have been granted and sent through the post possibly as early as June or July, if it was for this years Council Tax.

      You cannot appeal a Summary Warrant and there is no hearing. The reason is if you don’t think you were liable, or you should have had a discount or an exemption or even Coucil Tax Reduction, you appeal these decisions rather than the Summary Warrant.

      In terms of the Charge for Payment, this a form of Diligence.

      You cannot appeal this and the 14 days relate to the period the Charge gives you to pay the debt, otherwise you can face further Diligence like Earning Arrestments, Bank Arrestments etc.

      What I would suggest is you ask the Council to withdraw the Sheriff Officers Fee on the basis when your benefits changed they should have reapplied the deductions from your benefits for the arrears.

      If they refuse to, you could consider using their formal complaint procedure.

      Also make sure you are getting your full entitlement to Council Tax Reduction and a Single Person Discount if you are entitled to one. When you contact the Council ask them to check for you.

  7. Hayleigh

    Hi there

    I received a Charge for Payment through my door today for Council Tax.

    I’m stumped as I have been paying off the debt via a Scott and Co direct debit.

    I hadn’t realised I missed a payment until recently.

    I dont quite understand a Charge for Payment and the court and threatening words such as Bankruptcy has me panicked.

    Please some advice

    1. Scottish Adviser Post author

      Hi Hayleigb

      First thing is don’t be overly alarmed.

      I am not totally clear of your circumstances, but the Charge for Payment is for non-payment of Council Tax arrears.

      These could be this years arrears and you have not been paying your current Council Tax and just paying everything to Scott and Co for your arrears.

      This is a common problem as people just arrange with the Sheriff Officers to pay their arrears and ignore their current liability.

      This means the current liability becomes a debt stacked on top of other year debts.

      You need to be paying your current Council Tax debt every year and then something towards your arrears. Sheriff Officers are not the best at telling you this.

      My advice is go to your local Citizen Advice Bureau or Local Authority Money Advice Sevice and get yourself an affordable repayment plan.

  8. Charlie

    Hi there,

    I am looking for advice.

    I am a student and have been sent a charge for payment for council tax arrears.

    I was under the impression I had already applied for council tax exemption.

    I have however done this again now and put in the dates which I started university after receiving this letter.

    I am worried, however, as this payment is unfair and I do not owe this money.

    I haven’t ever had a letter from Council Tax this year stating that I haven’t paid.

    The council tax office don’t have my bank account details as I have never had dealings with them. Is it still possible they can arrest my bank account?

    I don’t work and rely on student loan to support myself and my 2 children.

    What can I do from here?

    Thanks in advance

    1. Scottish Adviser Post author

      Hi Charlie

      As your dispute relates to your liability and whether a Student Exemption Application has been properly applied, submit a letter of complaint to the Council and ask they place any further action on hold until your complaint is dealt with.

      I am assuming you live on your own and there is no other liable adults living in your home (otherwise it would be a Student Discount you applied for – 25% – although even if that is the case, depending on the circumstances of the other adult, they may be able to apply for Council Tax Reduction).

      I am also assuming you were a Student since April 2019, as that’s when the new financial year will have begun.

      Council Tax Bills should have been sent out in February or Match 2019, so if you haven’t received any correspondence, mention that in your complaint.

      The Council should deal with the complaint within 2 months. If they don’t or if they do and you are not happy with their proposed resolution of it, you can appeal it to the Valuation Tribunal.

      Just as a further piece of information, they will have wanted a stamped letter from you Insitute of learning as proof of your participation on your course. Do you know if you provided them with this. If you didn’t, I would speak to your University for proof of your enrolment on this course and give it to the Council and ask they backdate your exemption/discount to the date You began on the course.

      I am also assuming the arrears are for this financial years and do not relate to previous years.

      Finally, whilst the Charge for Payment is active and has not been put on hold there is a risk the Council could carry out further Diligence.

      If they don’t know where you bank account is this may make it more difficult for them, but bank account arrestments are only one of many options available to them.

  9. Sarah

    Hi,
    I’ve just had a charge for payment through the door. It is for credit card, which I was unable to pay off when I lost my DLA and associated premiums.

    The decree was granted in December 2018.

    I an not working due to ill health.

    I care for husband who has a long term MH illness.

    We’re on benefits with no other income and live in a council house, no assets.

    What can they do if I have nothing?

    1. Scottish Adviser Post author

      Hi Sarah

      In theory they should not be able to do much. They cannot arrest your wages as you have none.

      However, they could try and freeze your bank account. If they do they could try and take anything over £529.90, the protected minimum balance.

      This could be challenged, but it is a lengthy process and unless it is, it will stand. If you have less than £529.90 in your account, it will fail, but you could get a £25 bank charge.

      I am assuming you don’t own a car.

      Depending on how much you owe you could be made Bankrupt, but if you are on benefits you won’t have to pay anything.

      The thing to remember is this debt will continue to increase, by at least 8% per annum and every time they try to do something, like serve a Charge for Payment they will add fees.

      I would suggest you contact your local Citizen Advice Bureau or Local Authority Money Advice Service and ask if they can write to them to explain your situation.

      If they are aware of it, the firm may be willing to give you some breathing space.

  10. Biz

    Hi,
    I have received a Charge for Payment for Business Rates on a property that my business used to rent until October 2018.

    But they have obtained the Charge for Payment in my name personally, while it was the company that operated the business from that address.
    Is this correct or should it have been in the business name and not me personally?
    If so, then what do I do to challenge and correct it.
    Thank you

    1. Scottish Adviser Post author

      It will depend whose name the lease was under. If it was your name then you will be personally liable for the business rates.
      If it was in the name of the business, it will depend on the type of business. If you were a sole trader, you will be held personally liable.
      If it was a partnership, partners can be held personally liable for the debts of the Partnership; if it was a limited company, then the Company is liable.
      You can get free advice and assistance from the Business Debt Helpline, who are a Charity.

  11. Thomas

    Hi,

    I got a council parking fine, and I moved home, they sent the letters out to my old address and then served a charge for payment at my old address.

    It wasn’t until I got a bank charge for a failed bank account arrestment I was made aware of all this.

    I was told when they served the charge they made enquires and confirmed I lived there and posted it through the door, but I hadn’t lived there for more than 2 years.

    I got the parking fine and I will pay that, but is there anything I can do to dispute the charge for payment?

    Cheers,
    Thomas

    1. Scottish Adviser Post author

      Hi Thomas

      I don’t think so.

      They were entitled to serve a Charge after they got the court order. You could argue it wasn’t properly served, but that would require an action in Court (which would cost money and a lawyer and in my opinion would not succeed as they would argue they served it at your last known address and made appropriate enquiries).

      Unfortunately, these debts can quickly increase if you don’t settle them within the first couple of weeks, when you normally can pay a reduced amount.

      If you are struggling with the full amount, call them and set up a repayment plan so they don’t take further enforcement action and add more fees. As they will.

      1. Kirsty

        Hi

        I am encountering the same issue.

        The creditor have had my details previously.

        Will this impact my credit file, despite little effort to try and contact me at my proper address?

  12. JOHN

    It is Hmrc and the date says sept 2019. A typo on their behalf.

    1. Scottish Adviser Post author

      Hi John

      If it is HMRC, I am presuming they have served a Summary Warrant, as this is normal for them. If you check the Charge for Payment it should say this on it, rather than a decree.

      If it is a Summary Warrant, they were required to serve the Charge before doing the bank arrestment.

      The fact the Charge has the wrong date on it, is significant in my opinion as the date of a Charge for Payment is legally very important, as it’s from the date you can tell when they were allowed to take certain actions.

      For that reason I think you could raise an objection through the Sheriff Court on the grounds the arrestment is incompetent, as the Charge it was executed on contained significant errors as to the date.

      You do this by raising a notice of objection through the Sheriff Court. The cost of raising the action is free as it is done under the Debtors (Scotland) Act.

      See my page on challenging a bank arrestment here.

      I cannot obviously guarantee you will succeed, but I personally think you have a strong case and the funds arrested should be released to you.

      The problem is they will probably serve another Charge for Payment and also try and arrest your account again.

      You do need to think, therefore, about how you are going to address this debt and speak to a money adviser. They may suggest using the Statutory Moratorium procedure, whilst you consider all your options. Timing, however, is crucial, so I would suggest you get advice. They may also be able to help you submit your notice of objection.

      Find your local Citizen Advice Bureau here or contact your local Council and ask about their money advice services.

  13. JOHN

    Hi

    I received a Charge for Payment from sheriff officers. It said on it, that it was issued on September 2019

    That is an error.

    I complained that the date is wrong, but they still arrested my bank account.

    Is the wrong date on a Charge for Payment grounds for appeal?

    1. Scottish Adviser Post author

      Hi John

      Quick question, if you don’t mind. What is the debt for?

      The reason I ask is if the debt is for Council Tax or a HMRC debt, where a Summary Warrant has been issued, a valid Charge for Payment has to be served first. If it is not for one of those types of debts, a bank arrestment does not require a Charge for Payment to be served first.

      So even if the Charge was invalid, the bank arrestment could still be valid.

  14. John

    Hi

    I was issued a Charge for Payment a while back and came to an arrangement to pay the creditor, but have been unable to do this.

    Am I able to do a Moratorium to prevent any arrestments?

    Debt advice have said it will not work, because action has already been taken.

    1. Scottish Adviser Post author

      Hi John

      There is no reason you cannot use a Moratorium, even if a Charge for Payment has previously been served and expired.

      What it cannot do is reverse what has already happened: the serving of the Charge, but it can still stop:

      Bank Arrestments;
      Earning Arrestments;
      Attachments;
      Exceptional Attachment Orders; or
      Even a creditor raising a petition for your sequestration.

      The risk of someone trying to make you bankrupt may be reduced if the Charge was served over 4 months ago, as Creditors who want to use it to make you bankrupt have only 4 months to do so, then they need to serve another.

      Remember, though, the Moratorium is only a short term solution that lasts 42 days and can only be used once in any 12 month period.

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