Author Topic: INHIBITION ORDERS in Scotland  (Read 3352 times)

Scrooge

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INHIBITION ORDERS in Scotland
« on: Sep 20, 2017, 01:03:59 PM »
There is often confusion about what an Inhibition Order is and whether it is the same as a Charging Order.


Inhibition Orders relate only to Scotland. Charging Orders do not exist in Scotland. An Inhibition Order is granted by a Court after or at the same time a creditor obtains a Decree against you for an unpaid debt. An IO is on YOU not the house. It stops YOU selling the house without paying the inhibiting creditor first. It lasts for 5 years, but it can easily be renewed every 5 years hence in effect it is best viewed by a debtor as permanent.


It is now possible for a creditor pursuing an inhibition to get an interim inhibition before the Court has actually granted the Inhibition Order, which means you have less time to plan and react to what might be coming. An IO stops YOU selling without paying the debt, but it can't lead to your house being sold or further enforcement. It will just sit there until you sell the house.


If you have negative equity or low equity it's not so concerning, but if houses go up in price significantly it will be, because your increased equity will be swallowed by the inhibiting creditors if you sell up. If you do have house equity then they are going to hoover it up when you try and move house.


If you fully intend never moving from your current home you don't need to worry too much. However, if you want your equity to pass to anyone else when you die, the inhibiting creditor will swallow part or all of it when your house is sold. Although an IO expires after 5 years, it's best to view it as permanent because they can just get it renewed very easily.


If you are in debt trouble with creditors threatening to get Court decrees against you, the Court may well accept a low repayment plan based on your income, but 1 or more of your creditors may get an Inhibition Order against you.


If you sit there hoping Court action might not happen or just thinking you can pay £1 a week if you have no income, you are likely to shoot yourself in the foot, because irrespective of the Court's decision you may well end up with Inhibition Orders.


An IO can be wiped by self sequestrating within 60 days of when it was granted in Court. However, If you are not considering that, then the only way you can avoid the possibility of inhibitions is to sell your house before they get the IO. As they can now get interim IO's before the IO is granted, if you want to sell up you need to act quickly. Selling even for a few thousand less might be a better option if you have large debts than sitting there and having inhibitions slapped on you.


I hope this is helpful.




Note:

My comments are based solely on my own experience of debt. It is always best to seek the advice of a professional debt adviser/agency as soon as possible.