Important information about sequestration
Before going ahead, you need to know how your assets, home and job could be affected.
Your trustee will look at your finances and what you can afford.
They look at:
- What you need for essential spending
- What can go towards your debts
- What your situation has been in the past
You must be open at honest with them.
Conditions of sequestration
There are some restrictions during bankruptcy:
- You must tell a lender you are bankrupt if:
- You apply to borrow more than £2,000 on your own
- You apply to borrow more than £2,000 with someone else
- You borrow any amount and already have £1,000 of new debt since your bankruptcy
- You cannot set up a limited company
- You cannot act as a company director
- You must not hide assets (items of value)
- You must work with the trustee. You cannot refuse
- You cannot act as a member of the Scottish Parliament
- You cannot act as a member of any local council
- You cannot act as a member of a school board
- You cannot act as a Justice of the Peace
You bankruptcy can be extended if you do not follow these rules.
In rare cases you can be prosecuted, fined, or imprisoned.
Talk to your trustee if you have power of attorney for another person.
Your bankruptcy conditions can be extended
Bankruptcy conditions can be extended up to 15 years if you:
- Do not work with the trustee
- Take out debts you know you cannot pay back before going bankrupt
- Have debts from gambling or fraud
- Have run a business dishonestly
The trustee can extend your bankruptcy conditions if they decide you have done any of these. This is called a ‘bankruptcy restriction order’.
The trustee must formally apply to the Sheriff Court to add restrictions for five years or more.
Bankruptcy and your credit file
Bankruptcy shows on your credit file for six years.
It will also show on the ‘Register of Insolvencies’ for at least five years.
Speak to us if you think you would be at risk if your name and address appeared publicly on the register.
What if my finances get worse?
If you cannot afford your contribution any more, ask your trustee to:
- Change the payment amount
- Give you a 'payment holiday' period. This makes your Debt Contribution Order (DCO) last longer than four years