Sequestration
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
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.
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
- Your creditors will no longer pursue you for payment
- All regular payments to your creditors will stop
- You will no longer need to liaise with your creditors, instead the insolvency company would do this on your behalf
- Should your sequestration be completed to the satisfaction of the insolvency company, then you will be able to start again financially.
Negatives of sequestration
- Any monthly disposable income you have will need to go towards your sequestration
- If you own valuable items, such as a house or car these may be sold
- You cannot act as a director of a limited company
- There are some occupations where you are restricted from going down the route of Sequestration. Please check your employment terms and conditions
- 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 for the Minimal Asset Process route or £3,000 for full administration Sequestration
- You cannot realistically meet any other debt solution
- Not have been made bankrupt in the last 5 years
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 to enter the Minimal Asset Process (MAP) route to sequestration is £1,500. If you do not meet the MAP criteria then you must have £3,000 of unsecured debt to be applicable for sequestration.
How can I apply for Sequestration?
You can apply for your own sequestration via an approved money adviser. There is a £200 fee, however if you meet the MAP criteria then the cost is £90. A creditor can also petition to court for your sequestration once they have taken appropriate steps to recover the debt. This can include a charge for payment or statuatory demand being issued and the time to pay on the document expiring with the debts remaining unpaid.
How much will this cost me?
To apply for the minimal asset process (MAP) route to sequestration it costs £90. If you are applying for a certificate of sequestration the application fee is £200.
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 can enter sequestration via the MAP or certificate of sequestration routes. The correct method will depend on your financial situation.