22nd July 2015

Debt Recovery Legal Actions In Scotland Are In Decline

Just 35,388 debt recovery cases were brought to the Scottish courts in the past year. New official statistics reveal that the total volume of legal debt recovery activity in Scotland has now fallen for the fifth year running. The total number of people being legally pursued for debts is now running at around half the level of 2008-09.


Some factors leading to this decline may include:

  • Different types of borrowing becoming more and less prominent.

  • An overall decline in the level of average borrowings.

  • An improving economy with reduced unemployment.

  • A perception amongst creditors that expensive legal action is unlikely to produce results.

  • The availability of moratoriums to protect debtors from creditors (see below).

While an overall decline in the statistics is welcome, this development will bring no relief to you if you’re facing a trip to court about an unpaid debt.

Prevention Is Better Than Cure

Good communication can make it much less likely you’ll be taken to court over your debts. Many people feel intimidated when debt collectors get in touch. For some people the natural reaction to this fear can be to “bury their head in the sand” and fail to engage with the debt collectors at all. Letters and phone calls are often ignored.  

This can turn out to be a big mistake. Lenders and debt collectors understand that some people experience repayment difficulties. They also understand that people cannot pay over money that they simply don’t have. Because of this, they’re often very patient with debtors who stay in touch with them and who are clearly doing their best to address their debts (even if they can’t pay it all back now).

When a debtor fails to engage with a debt collector the position may be very different. The debt collector doesn’t know whether you’re experiencing repayment difficulty or simply choosing to spend your money on other things. They may feel that taking the matter to court is the only way to get to the bottom of what’s going on.

As difficult as it can be, talking to creditors is extremely important.

Get Professional Debt Advice

A second way to prevent legal action from happening is to get professional debt advice. You might not feel confident about liaising with debt collectors, so why not get some help with this from a debt advice professional? It need not cost you any money (or much time) to do this.

With your assistance, a debt adviser will quickly come to an understanding of your financial circumstances. They’ll be able to point you in a direction to more easily help yourself, or alternatively to inform you about available debt solutions that can bring your finances back under control.

Once a formal debt solution is in place, your unsecured creditors will become unable to recover your debts from you through the courts. If they know you’re investigating your debt solution options, your creditors may delay starting legal debt recovery action against you. If you’re worried that legal recovery action is imminent, you may get help putting a moratorium in place.

Moratoriums in Scotland

Are you worried that a creditor is about to start legal action against you? Do you need a little more time to get advice and find out what your debt solution options are?

Debt advisers can often help you to apply for a “moratorium”. This is a six week period of breathing space during which your creditors cannot start legal action in the Scottish courts to recover your debts. It gives you time to collect information, get advice, and to make decisions.

Your moratorium will be registered publicly, but does not compel you to deal with your debts in any particular way. You could even eventually decide to do nothing at all. It could potentially be used to provide you with some time to propose a debt arrangement scheme, a protected trust deed, or to become bankrupt.

During the six week moratorium period in Scotland interest and other charges on your debts are put on hold. They may however be re-added if you subsequently choose not to enter into any type of formal debt arrangement. With few exceptions, it’s not possible to benefit from more than one moratorium in any twelve month period.

Further Help And Advice

You may choose to approach your local Citizens Advice or a law centre with concerns about debt recovery action which is likely to reach the courts (or which already has done). You might also choose to secure your own legal representation privately. 

Our qualified debt advisers are also available to help you - call 0141 249 0416 or complete one of the contact forms on this website. You may also wish to ask questions on our forum – a panel of insolvency experts are ready to share their knowledge and experience with you.  

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