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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.

Scottish Sequestration

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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.

Scottish Sequestration Questions

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.

Benefits of sequestration

  1. Your creditors will no longer pursue you for payment
  2. All regular payments to your creditors will stop
  3. You will no longer need to liaise with your creditors, instead the insolvency company would do this on your behalf
  4. Should your sequestration be completed to the satisfaction of the insolvency company, then you will be able to start again financially.

Negatives of sequestration

  1. Any monthly disposable income you have will need to go towards your sequestration
  2. If you own valuable items, such as a house or car these may be sold
  3. You cannot act as a director of a limited company
  4. There are some occupations where you are restricted from going down the route of Sequestration.  Please check your employment terms and conditions
  5. Entering sequestration will have a negative impact on your credit rating, making it harder to obtain credit in the future

Criteria to enter sequestration

- Must owe at least £1,500 in unsecured debt

- You cannot realistically meet any other debt solution

- You will need "apparent insolvency"

We Have The Answers

 
 

What is Sequestration?

In Scotland bankruptcy is sometimes called sequestration.

 

How much debt do I need to have for Sequestration?

The minimum amount of debt is £1500.

 

How can I apply for Sequestration?

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.

 

How much will this cost me?

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.

 

What will happen to my credit rating?

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.

 

Are there other ways to enter Sequestration without waiting for my creditors to take action against me?

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.