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Can my house and my possessions be sold to pay my debts?

This advice applies to Scotland

Can my house be sold to pay my debts?

When the debt is for a mortgage or loan secured on the home

When you have mortgage arrears or arrears for a loan secured against your home your lender can take a number of steps to make you pay the arrears and this may include selling your home.

When the debt is not for a mortgage

When your debts are not for your mortgage or other secured loan a creditor can take legal action to stop you selling your home. This is a power called inhibition and is used by a creditor to safeguard the value in your property. As long as an inhibition is in force it means you can't sell your property and keep any profit from the sale. An inhibition can be in force for 5 years.

A creditor must send you a Debt Advice and Information Package (DAIP) and if this was not done the inhibition will not be valid. You are likely to need help from an adviser if you find yourself in this situation.

You must get advice about your debts if there is an inhibition over your property, for example at a Citizens Advice Bureau - where to get advice.

Can a sheriff officer take my possessions away to pay off my 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

Step 1: Check what kind of order the creditor has

If the creditor has an interim attachment or attachment

When 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. If you store any non-exempt goods in your garage these goods could be seized and sold. However you may be able to argue that even the non-exempt goods are required for work. 

What is exempt from being taken to be sold

The following items are listed as exempt in law:

  • a mobile home which is your only or principal residence
  • tools of the trade (including books and other equipment), reasonably required by you for your trade, profession or business up to £1,000
  • tools reasonably required for keeping the garden in order
  • a vehicle up to the value of £3,000 if you can show that you need it
  • clothing, toys - this means that most of a child's personal possessions and toys should be exempt from being taken
  • furniture, bedlinen, cooker etc, 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 it returned.

If the creditor has an exceptional attachment

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 attached under this order. The sheriff officer has powers to open shut and locked places in your home to attach and remove any goods that are not exempt to put into a sale.

Step 2: Check the correct procedures have been followed 

A creditor must have a charge for payment or a charge to pay and must have provided you with a Debt Advice and Information Package before the action to attach your possessions can be legally taken. If you have an attachment against your possessions you must get advice to check that the rules about selling your possessions are being properly followed and what other options you may still have to pay the debt. It is illegal for a creditor to harass you.

Your home and possessions are assets in a bankruptcy/sequestration

When you own your own home and have possessions that could be sold because they are not exempt from attachment you could lose them if a creditor forces you to be made bankrupt/sequestrated.

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

  • a single creditor in the UK or another EU member state to whom you owe at least £3,000, or
  • a group of creditors in the UK or other EU member states to whom you owe jointly at least £3,000.

If you are in a DAS Debt Payment Programme you will have an approved money adviser and you must get in touch with the adviser. Creditors cannot make you bankrupt if you are in a Debt Payment Programme.

If you are in a Protected Trust Deed creditors cannot take any action to enforce payment of debts or make you bankrupt and your affairs will be handled by a trustee.

Creditors are only likely to take the extreme action of trying to make you bankrupt as a last resort because you have not paid your debts using other methods. You must get advice from a money adviser if you are being threatened with bankruptcy.

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