Sequestration is the legal term for bankruptcy in Scotland and could help you write off unaffordable debts and become debt free in a year.

Sequestration is a legal procedure where up to 100% of your unsecured debts could be written off, normally after a year. This is often seen as the last resort to help deal with serious debts that cannot be repaid. Sequestration is offered when no other debt solution can help deal with the situation.

Disadvantages of Sequestration

  • Your assets, such as a house or car, may be sold to help repay your creditors
  • You will be required to pay a fee to apply for Sequestration
  • Your credit rating will be affected for at least six years
  • You are unable to act as a company director
  • Your details will be added to the public register
  • Your job could be at risk: certain trades and professions will not allow you to work when bankrupt
  • You cannot obtain more than £2,000 of credit, or any amount of credit, if you already have debts amounting to more than £1,000, without declaring your sequestration to the lender

Advantages of Sequestration

  • All your debts included in the Sequestration will be written off
  • You will no longer have pressure from creditors
  • You will be debt free in a year once discharged from Sequestration
  • The Insolvency Practitioner will liaise with your creditors on your behalf

Is Sequestration right for me?

  • You owe at least £3,000 in unsecured debt
  • You must live in Scotland
  • You have not been bankrupt in the last five years
  • You must pay a £200 application fee to the Accountant in Bankruptcy (AIB)

How do I apply for Sequestration?

You will need a Certificate of Sequestration issued by a licenced Insolvency Practitioner or a Money Advisor. During this process they will assess your financial situation to see if you’re suitable for Sequestration. If you are granted a Certificate of Sequestration you have 30 days to submit it, with your application, for Sequestration.

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Updated on 2018-04-29T13:24:27+01:00, by Kristian Stock.