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i This solution is only available in Scotland.

Sequestration (Scottish bankruptcy). What is it and is it right for you?

Sequestration is a debt solution available in Scotland that can help you write off debt that would otherwise take many years to clear.

Sequestration is a form of insolvency and may be suitable if you can’t pay back your debts in a reasonable time. Assets you own, such as your house or car, could be sold to pay off your debts.

If your assets are worth more than your debts, or if all of your regular payments are up to date and you can afford to keep paying them, sequestration may not be the best option for you.

Sequestration has serious implications for your future and should never be undertaken lightly.

Sequestration is only available if you live in Scotland. If you live in England, Wales or Northern Ireland, bankruptcy is a similar solution, but it’s important to note that it has different benefits, risks and fees associated with it.

Sequestration at a glance

Benefits Risks
You can be debt free in a short amount of time. If you have any assets, like a house or car, these may be sold to release funds for your sequestration.
All your unsecured debts are usually written off, though you may be required to make a contribution.  It may have implications for your job – for instance you will not be able to act as a company director.
You'll receive no further contact from your creditors. You may find it difficult to take out credit, as sequestration will remain on your credit file for six years.

Things to consider

Deciding to become bankrupt is a big commitment. There are a number of issues to consider, including:

  • If you’re a home owner and have equity in the property you may have to sell your home
  • You may need to sell assets such as your car
  • Some employers - most commonly financial institutions - do not allow people who are bankrupt to work for them.
  • You’ll not be able to be a director of a limited company or remain in some public office appointments
  • Credit reference agencies will record details of your bankruptcy and your credit rating will be affected for six years. It may be difficult or more expensive to obtain credit after your bankruptcy
  • Your name and address will be added to a public register called the Register of Insolvencies (also called the RoI), for a period of five years
  • You may have to pay any surplus income you have, after your essential living costs are paid, into your bankruptcy for four years

How sequestration works

Before you can apply for sequestration you need to:

  • Owe more than £3,000
  • Be living in Scotland or have lived in Scotland sometime during the last year
  • Not have been made bankrupt in the last 5 years

You can apply if you’ve received one of the following:

  • A certificate for sequestration issued from an approved debt advisor.
  • A charge for payment served on you and the 14 days allowed for payment have passed without you making a payment
  • A summary warrant to recover rates or taxes and an attachment or an exceptional attachment order has been made against items you own and the 14 days allowed for payment have passed without you making a payment.

At StepChange Debt Charity we have  approved debt advisors who can advise you on every debt solution available to you. If Sequestration is appropriate we can issue a certificate for sequestration as evidence that you can’t afford to pay your debts. We can also support you through the application for sequestration up until it is submitted to the Accountant in Bankruptcy. These services are completely free.

The fee for sequestration, paid to the Accountant in Bankruptcy, is £200. There are no exemptions or reductions so the full amount needs to be paid.

Sequestration normally lasts for a year. During this time you can’t borrow any more credit and you must let the Accountant in Bankruptcy (AiB) know if your situation changes. They're the governing body responsible for administering the process of personal bankruptcy in Scotland. You may have to sell valuable assets such as a vehicle, but you can keep the things you need for day-to-day living.

Your details will also be added to a public register, called the Register of Insolvencies (ROI), for a period of five years.

Sequestration advice

Making yourself bankrupt by applying for sequestration is a big step to take and requires expert debt advice.

If you haven't already received advice from us and are considering sequestration, you can use our online Debt Remedy tool, which will provide you with the best solution to your debt problem in just 20 minutes. Or, if you’d prefer to speak to us, call our free Helpline on 0800 138 1111 (free from all landlines and mobiles) and speak to one of our debt advisors.

Alternative debt solutions

While sequestration may be the correct solution to your financial situation, there are some other options that you might want to take a look at:

Is Sequestration right for you?

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Why choose us?

  • Our help is FREEWe won’t charge you a penny for the help and support we provide while you apply for sequestration.
  • Specialist advisorsOur Glasgow-based debt advisors will give you all the help and support you need, no matter what debt solution is recommended.

Helping you become debt free...

“I wish to thank your staff for all the great help they gave me when I was in so much debt.
They were a pillar of support to me.” (Leslie, Essex)

Foundation for Credit Counselling Wade House, Merrion Centre, Leeds, LS2 8NG trading as StepChange Debt Charity and StepChange Debt Charity Scotland. A registered charity no.1016630 and SC046263. It is a limited company registered in England and Wales (company no:2757055). Authorised and regulated by the Financial Conduct Authority.

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