If your house and possessions are being sold to pay your debts

Powers to sell your house to pay your debts

If you owe someone money (a creditor), they might be able to make you sell your home or stop you selling your home. The powers a creditor has depends on what your debt is for.

If your debt is for a mortgage

If you have mortgage arrears or arrears for a loan secured against your home, your mortgage lender can take steps to make you pay the arrears. This might include selling your home. Find out more about mortgage problems.

If your debt isn't for a mortgage

If your debt isn't for your mortgage or another secured loan, your creditor can take legal action to stop you selling your home. This power is called inhibition and is used by a creditor to safeguard the value in your property.

While an inhibition is in force, you can't sell your property and keep any profit from the sale. An inhibition can be in force for five years.

If your creditor wants to use an inhibition, they must also send you a Debt Advice and Information Package (DAIP). If they don't the inhibition isn't valid. You're likely to need help from an adviser if you're in this situation.

You must get advice about your debts if there's an inhibition over your property, for example at your local Citizens Advice Bureau.

Powers to take your possessions to pay your debts

There are very strict rules about what possessions can be sold to pay off your debts. The process is called attachment.

There are three types of attachment:

• an interim attachment

• an attachment

• an exceptional attachment.

If your creditor takes legal action using an attachment, you should take the following two steps.

Step 1: Check what kind of order your creditor has

If the creditor has an interim attachment or an attachment, only possessions outside your home can be taken away and sold at auction. This is usually done by sheriff officers for the creditor.

The following items are exempt from being taken:

• a mobile home - if it's your only or main residence

• tools of the trade - including books and other equipment that you reasonably require for your trade, profession or business, up to the value of £1,000

• tools reasonably required for keeping the garden in order

• a vehicle up to the value of £3,000 - if you can show you need it

• clothes and toys - this means that most of a child's personal possessions and toys should be exempt from being taken

• furniture, bed linen, cooker, computer - and other household goods that are reasonably required.

If a sheriff officer tries to remove any of these items from your storage area, you can remind them that these goods are exempt under section 11 of the Debt Arrangement and Attachment (Scotland) Act. You have 14 days to ask to have the goods returned.

Any other goods that are not exempt could be seized and sold if you store them in your garage. But you might be able to argue that your non-exempt goods are required for work. 

A creditor can apply to court for an exceptional attachment to try to sell off some of the possessions in your home. Most of the essential goods in your home are exempt from being taken away. Sheriff officers have powers to open locked places in your home to take away and sell any goods that aren't exempt.

Step 2: Check your creditor has followed the correct procedure

Your creditor must have a charge for payment or a charge to pay and must have provided you with a Debt Advice and Information Package (DAIP) before they can take legal action to take away your possessions.

If you have an attachment against your possessions, you must get advice to:

• check that your creditor is following the rules about selling your possessions

• find out what other options you still have to pay the debt.

It's illegal for a creditor to harass you. Find out more about the powers of sheriff officers.

If your home and possessions are assets in a bankruptcy

If you own your home and have possessions that could be sold because they're not exempt from attachment, you could lose them if your creditor forces you to be made bankrupt. Being made bankrupt in Scotland is also called being sequestrated.

You can be made bankrupt (sequestrated) by creditors in the following ways:

• a single creditor in the UK or an EU member state (other than Denmark) to whom you owe at least £5,000

• a group of creditors in the UK or EU member states (other than Denmark) to whom you jointly owe at least £5,000.

Your creditor is only likely to take the extreme action of trying to make you bankrupt as a last resort because you haven't paid your debts using other methods.

You must get advice from a money adviser if you're being threatened with bankruptcy. Find out more about bankruptcy.

If you owe money to people or companies in the EU

Any debts you owe to people or companies in the EU might not be covered by bankruptcy.

Your creditors could keep asking you for money, for example by calling you or sending you letters. If you live in the EU, they could take you to court in the EU.

From 1 January 2021, EU creditors have to sue in the UK rather than in the EU, even if they have an existing judgment. The UK will recognise EU judgements entered or started before 31 December 2020.

If you live in the UK but have a home in the EU with a mortgage from an EU lender, the lender could take you to court in the EU.

Get legal advice if you have creditors in the EU.