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Bankruptcy and Diligence etc. (Scotland) Act 2007

General and miscellaneous
Section 191 – Money in common ownership

633.Section 191(1) permits money which is owned in common between a debtor and third party to be attached. Common ownership means that more than one person owns a share of the money.

634.Subsection (2) permits a third party who owns money in common with a debtor to buy out the debtor’s share in the money so that the third party becomes the sole owner. This is done by paying the judicial officer an amount equal to the debtor’s interest in the money. Before being able to buy out the debtor’s share, the third party must first satisfy the officer that the third party is a part owner of the money. But, if the officer is not satisfied, the third party can apply to the sheriff and if the sheriff is satisfied as to the third party’s ownership the buy out can go ahead.

635.Subsection (3) provides for the third party to apply to the sheriff for an order declaring the attachment of money owned in common to be unduly harsh to the third party. The application has to be made before the money is paid to the creditor under a payment order or is realised under an order for immediate realisation (see section 181). If the sheriff makes such an order the money attachment ceases in relation to the money owned in common.

636.Under subsection (4), where the third party buys out the debtor’s interest in money under subsection (2) or where a sheriff makes an order under subsection (3), the officer is permitted to attach other money owned and kept by the debtor at the place where the original attachment was carried out. This is an exception to the normal rule in section 176(3) that a second money attachment in the same place is not allowed.

Section 192 – Procedure where money owned in common is disposed of

637.Section 192 covers the situation where a third party claims common ownership of money with a debtor and does so before payment to the creditor under a payment order or realisation under an order for immediate realisation but the money is nevertheless paid to the creditor under the payment order or is transferred to another person under the provisions for realisation.

638.If the creditor subsequently admits that the third party was a common owner of the money or the third party satisfies the sheriff of this fact, then the creditor has to pay the third party an amount equal to the third party’s share of the commonly owned money.

Section 193 – Unlawful acts after money attachment

639.This section provides that a debtor who realises the value of an attached banking instrument, otherwise relinquishes the ownership of it or obtains, by fraud or other dishonest means, a banking instrument in place of such an instrument is in breach of the money attachment. Anyone who assists the debtor to breach the money attachment (and who knew or ought to have known about the money attachment) is also treated as having breached the money attachment. Such a breach is to be treated as if the person was in contempt of court. Contempt of court is punishable by any of, or a combination of, admonition, fine and, in extreme cases, imprisonment or detention. This section would cover the circumstances in which a debtor, whose cheque had been attached by a money attachment, requested a further cheque from the payer under the pretence that the cheque had been lost or stolen.

Section 194 – Appeals

640.This section provides that an appeal against any decision of the sheriff (except decisions to grant an order for immediate realisation of an instrument under section 181) may be made to the sheriff principal only with the leave of the sheriff and on a point of law. There is no further right of appeal against the decision of the sheriff principal.

Section 195 – Recovery from debtor of expenses of money attachment

641.Section 195(1) provides that expenses of money attachment for which the debtor is liable, can be recovered only by the money attachment in which those expenses are incurred. There is no other permissible method for recovering those expenses.

642.Subsection (2) provides that the expenses have to be recovered before the money attachment ceases to have effect or before the money attached is paid over to the creditor. Note that the amount of money attached is to include an amount to cover expenses (section 177(2)) so that when the money is paid over to the creditor there is an amount covering expenses (and under section 184(1) a judicial officer is entitled to retain an amount to cover the officer’s fees and outlays before paying the money attached over to the creditor).

643.Where the debtor opposes a payment order or other application on frivolous grounds or makes an application under the provisions of this Part on frivolous grounds, the sheriff may award expenses relating to any such application, opposition or hearing against the debtor and in favour of the creditor (see paragraph 4 of schedule 3). Subsection (3) provides that in those circumstances decree for payment of those expenses is granted against the debtor and in favour of the creditor so that the creditor can recover those expenses (in other words recovery of those expenses does not have to be done by means of the original money attachment).

644.Subsection (4) lists circumstances (all of which are a type of insolvency process apart from subsection (4)(c) which concerns the realisation of a floating charge) which may prevent a money attachment from proceeding. In those circumstances the expenses of the money attachment are still chargeable against the debtor and if they are not dealt with in the insolvency process they can be recovered by a further money attachment.

Section 196 – Liability for expenses of money attachment

645.Section 196(1) provides that schedule 3 to this Act will determine the creditor’s or debtor’s liability for the expenses involved in serving a charge and in procedures for money attachment. Power is also given to the Scottish Ministers to modify schedule 3 by adding or removing types of expenses or varying any description of expenses referred to in that schedule. This power is subject to the negative resolution procedure.

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