Sequestration is the Scottish version of bankruptcy.
Sequestration is a way for individuals in Scotland to get rid of their debts, however, if you have any assets, they could be sold to raise money for your creditors. If you’re in financial difficulty, sequestration could be a good option for you.
Sequestration is a form of insolvency and is designed to help you pay off the debt that you owe, this is an option if a Trust Deed fails or you cannot afford a Trust Deed monthly payment.
If you have any assets, they are transferred to an appointed trustee who would deal with them and with your creditors on your behalf.
If you are worried about the threat of sequestration or have other questions regarding your financial difficulties, you should seek help immediately. If you do something about your debt today, you can stop worrying about it tomorrow.
After speaking to an insolvency practitioner, and no other options are available to you, your application for sequestration will go to the Accountant in Bankruptcy (AiB).
The insolvency practitioner will approve your application for sequestration or reject it if they think another solution would be better for you.
If approved, a trustee will be appointed. The trustee will act on your behalf and deal with your creditors for you. The AiB will also set the level at which you will repay your debt. If you’re able to, this could be in the form of monthly repayment.
After sequestration is approved, creditors cannot pursue legal action against you or communicate with you. Usually, you are ‘discharged’ from sequestration after one year, although monthly contributions are expected for a total of 4 years.
Yes, there are alternatives to Sequestration that exist in Scotland. As well as the Trust Deed, there is also the option of a Debt Arrangement Scheme. It will largely depend on you. How much you can afford to repay, any assets that you own and many other factors.
In any scenario, we would always advise that you speak to a debt advice expert to find out which options are open to you.
Your acceptance will depend on the approval of the Accountant in Bankruptcy, (AiB), who may reject your application if they think another solution would better suit your needs.
There is a charge of £200 to go through Sequestration. You might be able to pay this in installments.
A Trustee’s fees and costs are met from the funds received into the bankruptcy through the realisation of assets and your monthly income contribution; there are no payments due by you over and above the agreed contributions from your income and/or assets.
For further information on our Sequestration fees, please see the link at the bottom of this page.
Sequestration ends when you are ‘discharged’, usually a year after you’ve formally entered the process.
Yes. Usually, credit reference agencies will hold information about Sequestration for 6 years from when it was first granted. Your details will be also added to the Register of Insolvencies for 5 years.
It is possible that being sequestrated could affect your existing employment and prospects for future employment.
If you are in any doubt then you should review your employment contract and/or speak confidentially to your HR department.
If you are working in the financial services industry, police, armed forces, prison service, licensed HGV driver, Chartered Accountant or are a member of any recognised professional body then you should take further advice, this will be discussed by your adviser prior to you making an application for bankruptcy. This list of affected jobs/careers is not exhaustive.
If you’re worried about whether Sequestration would affect your job call us on 0141 221 0999, find out more about all debt solutions available in Scotland.
Contact an expert money advisor at Trust Deed Scotland to find out more about the debt solutions available to you. We are here to help you decide the best course of action to suit your individual needs and support you every step of the way. If you would like a fresh start, get in touch today.