Sequestration is a legal order which confirms to your creditors you are unable to repay the money you have borrowed. Sequestration is only available to people residing in Scotland. The English, Welsh and Northern Irish equivalent is bankruptcy.
In November 2010 the certificate of sequestration came into effect. This route to sequestration makes it simpler to proceed with your own sequestration.
Another route into sequestration is the Minimal Asset Process which became applicable on the 1st April 2015 to replace the Low Income Low Asset (LILA).
There are different qualifying criteria for the various routes into sequestration however the advantages and disadvantages are all relevant.
If you live in Scotland then you may not need to consider Sequestration, a Protected Trust Deed or debt arrangement scheme could be more suitable. More information can be found on our debt advice Scotland Page.
People entering Sequestration often have a lot of questions about the debt solution.
The most common questions people have about sequestration are, how much does it cost, how will it affect my credit rating and how do i enter sequestration.
If you have any questions about Scottish bankruptcy and need advice our sequestration forum can help.
- Must owe at least £1,500 in unsecured debt
- You cannot realistically meet any other debt solution
- You will need "apparent insolvency"
In Scotland bankruptcy is sometimes called sequestration.
The minimum amount of debt is £1500.
A creditor must agreed to make you bankrupt. You then have apparent insolvency. This means that you are unable to meet payments as they fall due. Your creditor will have taken some form of legal action in the Sheriff court against you, typically a Charge for payment order, a Statutory Demand or an Earnings Arrestment.
There is a cost of £100 to administer the Bankruptcy and there are court fees. There is no waiver on this charge but you may be entitled to legal aid for the court fees.
You will be discharged from your Sequestration after 1 year, however a note regarding your sequestration will remain on your credit file for 6 years.
Yes, you may wish to consider the Low Income Low Asset (LILA) route or the Certificate of Sequestration. There is criteria you have to meet to be eligible for this route to Sequestration.