Bankruptcy Advice Scotland
Scotland has some slight differences when it comes to bankruptcy and writing off debt compared to the rest of the UK. It helps to have someone at hand who can help you understand what these differences are and where nuances in the law lie.
For example, temporary changes in the law (as a response to Coronavirus) have relaxed debt thresholds levels. Knowing this, and getting responsive help, is something our team can advise on.
Why is Bankruptcy called Sequestration in Scotland?
It is simply the terminology used in Scotland for declaring an individual bankrupt. If you’re living elsewhere in the UK, we recommend visiting our Bankruptcy page for more information.
How does Sequestration in Scotland work?
Sequestration is a process where insolvency is declared when someone can’t pay back their debts within a reasonable timeframe. The process typically occurs under two circumstances:
- When an individual gets in touch with a court or advisor to apply for sequestration
- When an individual owes creditors more than £3,000, and they force a declaration of sequestration if the debtor can’t pay
In either scenario, the help of a financial advisor is needed to act as a trustee/ insolvency practitioner on the individual’s behalf.
What effects does Sequestration have?
When someone enters sequestration, there are consequences of bankruptcy which should be known about. Restrictions are put in place to help ensure payments can be made, and to also ensure that business restrictions are adhered to. For example, an individual in sequestration cannot act as a company director or create a new business.
There are also very strict credit measures in place. Even after the initial 12 month period is over and payments have been made, details remain on the sequestration register in Scotland for at least six years, which has a big impact on credit rating.