Date lodged: 5 March 2019
To ask the Scottish Government under what circumstances a (a) registered social landlord and (b) factor can force a private home owner into bankruptcy.
Answered by: Kevin Stewart 13 March 2019
The circumstances under which an individual or company who is owed money can initiate bankruptcy proceedings will apply equally to registered social landlords and factors.
There are formal steps that must be taken to recover debts prior to petitioning for the bankruptcy of an individual in the Sheriff Court. This usually involves going to court to demonstrate that the person owes the debt. The Sheriff Court will issue a decree if satisfied that the debt is owed and this will enable the creditor to instigate formal recovery action including the issue of a Statutory Demand or Charge for Payment. On expiry of a prescribed period with debt remaining outstanding, a creditor petition can be presented to the Sheriff Court requesting that the person who owes the money be declared bankrupt. On receipt of a creditor petition, the Sheriff Court shall set a date for a hearing and the debtor will have the opportunity to challenge the bankruptcy proceedings.
The following conditions must be met before a creditor can present a petition:
- The creditor (either an individual or company) must be owed at least £3,000 which can include fees, charges and interest which has been added to the original debt - if the debt is below £3,000 the creditor can lodge a joint petition with other creditors provided the combined debts are at least £3,000.
- The person owing the debt must receive a copy of the statutory Debt Advice and Information Package containing information about where to get advice and what will happen if the debt is not repaid - this must have been issued at least three weeks and not more than 12 weeks before making a petition.
- The creditor must be able to demonstrate that the person with the debt is unable to repay their debts and therefore apparently insolvent - normally in the form of an expired Charge for Payment or Statutory Demand.