Sequestration Scotland (Bankruptcy)

The equivalent of Bankruptcy in Scotland is known as Sequestration. There is another form of sequestration known as Minimal Asset Process. An MAP is aimed at individuals with a lower income.

How does Sequestration In Scotland work?

Sequestration in Scotland is a form of insolvency and is designed to help you pay off unaffordable debts that you owe your creditors.

Through sequestration in Scotland, the control of your assets are transferred to an appointed trustee who would deal with your creditors on your behalf.

Once you’ve been sequestrated, you would be able to write off any unsecured debt you have after a year. If you’re in severe financial difficulties, sequestration could be a good option for you.

After speaking to a debt expert, like DAS Scotland, or an insolvency practitioner, your application for sequestration will go to the Accountant in Bankruptcy (AiB). The AIB is the government created body that oversees insolvency regulation in Scotland.

They will approve your application for sequestration or reject it if they think another Scottish debt solution would be better for you.

If the sequestration is approved, a trustee will then be appointed. The appointed trustee will act on your behalf and deal with your creditors for you.

The Accountant in Bankruptcy will also set the level at which you will repay your debt. If you’re in a position to, this could be in the form or a monthly repayment.

After you have been sequestrated in Scotland, your creditors then cannot pursue legal action against you or communicate with you. Typically, you are ‘discharged’ from sequestration after one year.

This process is almost identical to the more commonly known process in the rest of the UK called Bankruptcy.

Who qualifies for Sequestration in Scotland

✔️ You live in Scotland.

✔️ You are able to cover the £200 sequestration application fee.

✔️ You have the agreement from one or more of your lenders,

✔️ You are unable to repay your debts within a reasonable timescale.

Advantages of Sequestration

✅ Write off unaffordable debt within one year.

✅ Stop contact from creditors.

✅ Most unsecured debts can be included.

✅ HMRC & VAT debts can be included.

Disadvantages of Sequestration

❌  You may lose your home and any other significant assets.

❌  Some jobs are affected.

❌  Your credit rating will become significantly worse.

❌  You may need to repay your debts for a period of 3 years under an ‘income payment agreement’ even after being discharged from your sequestration.

Find Out More

Contact an expert money advisor at DAS Scotland to find out more about Sequestration in Scotland and all the other debt solutions available to you as a resident of Scotland.

Some people are put off by Sequestration due to the negative stigma attached to Bankruptcy. However, should this be the only debt solution for you, you are not alone – thousands of people in the UK are sequestrated/bankrupt every year.

We are here to help you make an informed decision based on your affordability and support you every step of the way. If you would like a fresh start, get in touch today.

📞 0141 380 0588

🕕 You can also try using our Debt Repayment Calculator tool