INS1131 - Insolvency and Insolvency Practitioners: Secured debts
In Scotland, for the purposes of this Manual, a ’secured‘ debt may arise in cases when the Recovery Office has taken enforcement action and executed a poinding and/or arrestment prior to sequestration or liquidation. Poinding was abolished with effect from 31 December 2002 by the Debt Arrangement and Attachment (Scotland) Act 2002.
In some circumstances the legal costs incurred can be claimed as a secured debt in the sequestration or liquidation. However the amount claimable as secured is limited.
A secured claim will be paid in priority to all other claims including a trustee or liquidator`s claim for outlays and remuneration.
No security is given for expenses when an earnings arrestment or conjoined arrestment order was in effect prior to sequestration. Such costs, if outstanding, would be claimed as unsecured.