Sequestration

Sequestration is the Scottish equivalent of bankruptcy and can allow for all your debts to be written off.

It’s an informal insolvency process that is an option if you’re unable to repay your debts. To be eligible for sequestration you must owe £3,000 or more. A licensed Insolvency Practitioner takes control of your assets and liaise with the people you owe money to on your behalf.

A sequestration application comes with a cost of £200 and is submitted the Accountant in Bankruptcy (AIB) with the agreement of creditors owed more than £1,500 or with a certificate of insolvency from an Insolvency Practitioner.

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Advantages of Sequestration

  • It’s possible to write off all unsecured debts.
  • Creditors can’t reject the sequestration.
  • Creditors can no longer take legal action to recover debts.
  • Your creditors can no longer contact you and will deal directly with your IP.
  • Interest, fees and charges are frozen – creditors can only claim for the outstanding balance as at the start of sequestration
  • If asked to pay a contribution it will be an affordable monthly payment that’s calculated in consideration with your living expense.

Disadvantages of Sequestration

  • Your credit rating will be affected for six years.
  • It will be difficult for you to obtain credit in the future.
  • You must declare that you are bankrupt to anyone you are looking to obtain credit from.
  • It could have implications on your employment.
  • Assets such as your home or car may be sold to release funds.

Get in touch with us about Sequestration today