Debt advice

Bankruptcy

(Also known as sequestration in Scotland) is a legal declaration that someone cannot pay their debts. If a person is declared bankrupt, control of things that they own is passed to a trustee who may sell them to pay money owed to creditors. A regular payment from a person’s income may also have to be made.

Creditor

Any person, business or organisation that is owed money by another.

Debt Arrangement Scheme (DAS)

A Scottish Government debt management tool. Allows a debtor to repay their debts through a Debt Payment Programme by giving more time for repayments, free from the threat of enforcement (diligence) or bankruptcy.

Debtor

Any person who owes money to another.

Decree

A formal order of court that says the debtor must pay money to a creditor. This might follow court action such as:

• a Simple Procedure for up to £5000
• Ordinary cause for greater than £5000

Diligence

Various forms of legal process taken by creditors to enforce repayment of overdue debts.

Heritable Property

Property in the form of land, houses, and buildings, so-called because it passed under the former law to the heir on the owner's death.

Insolvency Practitioner

A person (usually, but not necessarily, a chartered accountant) licensed and authorised to act as a trustee in sequestrations or trust deeds.

Mandate

A written authority to do something.

Protected Trust Deed (PTD)

A form of insolvency that transfers a debtor’s estate to a trustee to be realised for the benefit of creditors.

Punitive

Relating to, involving, or with the intention of inflicting punishment.

Statutory Moratorium

A protection from creditor debt enforcement. This protection is available to individuals as well as certain entities.

Trustee

A person who administers a bankruptcy or trust deed. In sequestrations, a trustee can be either the Accountant in Bankruptcy (AiB) or a private insolvency practitioner.