Step 4 Dealing with your non-priority debts

What if my creditors take court action?


Many people are frightened of courts especially when they feel guilty because they owe money. But a civil court is not there to judge anyone as guilty or innocent, but to settle disputes about money owed, and how to repay it. The court is not there to protect the interests of creditors alone.

When your creditor makes a claim through the sheriff court, different procedures apply, depending on how much your debt is. The order the court makes is called a ‘decree’. It states what you owe and how you should repay it.

Once the creditor has got a decree, they may try to take further action against you. There are a number of ways they can try to make you pay. This is called ‘diligence’. It is important that you understand your rights and the types of diligence that the creditor can use.

Sole traders, partnerships and limited companies

  • If you are a sole trader, you can use the information below as a general guide if you don’t dispute the debt.
  • If you are in a partnership, the creditor should serve a copy of the claim form on each of the partners. You should discuss the case with your partners before deciding what to do and agree a common approach. A majority of partners needs to agree to offer payment or defend the action. If you can’t reach an agreement with the other partners, you need to get legal advice from a solicitor. If the partnership has been dissolved (ended), creditors can take court action against each partner individually. If the partnership has been dissolved, you can use the information below as a general guide if you don’t dispute the debt.
  • If you are a director of a limited company, court action should not be taken against you as an individual unless you signed a personal guarantee or have been made personally liable by the court following a formal liquidation of the company. If action is taken against the company, the directors need to agree how to reply. If you have been taken to court as an individual, even though the business is a limited company and you have not signed a personal guarantee, you should get advice from a solicitor immediately. If you are being taken to court as an individual and there is no dispute, use the following information and fact sheets as a general guide.

See our fact sheet:

Sheriff court action for debt