Commencements 01 April 2008
1 April 2008

New provisions on Time to Pay Directions and Orders have come into force with commencement of the relevant sections of the Bankruptcy and Diligence etc. Scotland (Act) 2007

The most significant change is the availability of Time to Pay Directions or Orders for Council Tax and Non-Domestic Rates. The previous prohibition on the making of a Time to Pay Order where a summary warrant had been granted has now been repealed. As a result it is now open to debtors subject to a Summary Warrant for council tax or non-domestic rates to apply for a time to pay order. In practice instalment arrangements are reached informally either with debtors direct or advice agencies. It remains to be seen whether the formality of court applications will be used to any extent to have instalments set.

It should be noted that TTP Directions or Orders are not available for debts due to Central Government such as PAYE and VAT.

Time to Pay was introduced by the Debtors (Scotland) Act 1987 and gave the sheriff complete discretion as to whether to grant a direction or order and at what rate. The 2007 Act has now set out the circumstances that the Sheriff has to take into consideration as follows.

  • the nature of and reasons for the debt in relation to which the order is sought
  • any action taken by the creditor to assist the debtor in paying that debt
  • the debtor's financial position
  • the reasonableness of any proposal by the debtor to pay that debt
  • the reasonableness of the objection by the creditor to the offer by the debtor to pay that debt.

It is likely that most if not all sheriffs took at least some if not a total combination of these factors into account when granting orders. Again it will be a matter of wait and see what difference if any a statutory set of factors to be considered impacts on the courts' consideration of such applications.