When it comes to debt recovery, a pursuer must obtain a payment decree from the Sheriff Court against a defender (debtor), and then take steps to enforce the decree in order to recover sums due.

One of a number of different procedures a pursuer can utilise,with a view to recovering an outstanding sum, is an inhibition.

• Once registered this prohibits a defender from selling, transferring or otherwise disposing of any land and other immoveable assets i.e. houses and commercial premises, until the debt is settled in full.
• Further, it prevents the Defender from securing any new loans against his property.

Inhibitions can also be used when an action for payment has not been decided by the Court, to secure the debtor's fixed property, pending the outcome of the Court action in order to safeguard his interests.

Inhibitions however do have limitations:

• They cannot be applied where prior missives have been concluded or where property is being sold under Power of Sale (following repossession by a mortgage)
• A Sheriff can limit them if a decree has already been granted e.g. transfer of property to someone else. (Where an inhibition is limited it only applies to the property specified in the action, or by the Sheriff.)
• It is valid for 5 years from the date it is registered in the Register of Inhibitions and Adjudications
• It isn't valid after the outstanding amount is paid in full, the 5 year period expires or on the death of the debtor. However a pursuer can seek to renew the inhibition. The expenses of the inhibition, including those expenses relating to the discharge of the inhibition also require to be paid by the defender

After decree has been granted, a schedule of inhibition must be served on the defender. If the defender is an individual this must also include debt advice and an information pack, ensuring they know where to seek financial advice and assistance.

It should be noted that an inhibition does not give the creditor any preference if the debtor becomes bankrupt or in any other process where there is ranking of debts.

If you would like more information on inhibitions and debt recovery or any other debt enforcement order, please contact one of our experienced debt recovery team.