There are a number of ways of recovering money owed to you by a person or business.
- use a mediation service
- make a court claim for your money
- send a statutory demand
You could also consider making someone bankrupt if they can't pay.
If someone owes you money and hasn't arranged to pay it back after you've spoken or written to them, mediation is an option.
A mediation service could be quicker and cheaper than making someone bankrupt.
Mediation happens when an impartial person helps people agree to a solution following a disagreement.
There can be a fee for mediation but it's cheaper than hiring a solicitor and taking court action — the fee is based on how much is owed.
Find a mediator on the Scottish Mediation Network website.
If mediation doesn't work, you can make a court claim for your money.
The Scottish Government provides information about alternatives to going to court. Other legal processes, known as diligences, can be used to recover debt. You can get advice about these processes from a solicitor, Citizens Advice Scotland or Money Advice Scotland.
You can apply to the court to wind up a company if it can't pay its debts.
A statutory demand can be used to ask for payment of a debt from an individual or company. When an individual or company gets a statutory demand, they have 21 days to either settle the debt or reach an agreement to pay.
Failure to pay or to deny the debt makes the debtor apparently insolvent and liable to sequestration (bankruptcy).
You can download a Statutory Demand form from the Accountant in Bankruptcy website.
The demand must be served by a sheriff officer. You can find more information about sheriff officers on the Society of Messenger-at-Arms and Sheriff Officers website.
Challenging a statutory demand
An individual can formally issue a denial of the debt. The denial must be returned by recorded delivery within a 21 day period.
Legal advice should be considered before any action is taken.
Making someone bankrupt if they can't pay
If you've used a statutory demand to request money you are owed and the debtor has ignored the statutory demand or can't repay the money, you can ask the sheriff court to make them bankrupt. The debt must be at least £3,000.
The costs may be high and you may not get any of your money back. You must pay the Accountant in Bankruptcy a fee of £100 when the petition is submitted and a further £200 when the petition is awarded.
Bankruptcy has serious consequences for debtors. You should be aware that you may not recover the amount you are owed by making someone bankrupt.
A creditor's guide can be downloaded from the Accountant in Bankruptcy website.
Get more information about sheriff officers on The Society of Messenger-at-Arms and Officers website.