The vast number of debt solutions can seem intimidating at first. Especially because many of them seem so similar, with comparable requirements for the application and a seemingly identical process thereafter. Part of this challenge is purely down to terminology. Many of the processes we offer having a counterpart with the only significant difference being for which region they apply to. Remember, Scottish financial law is separate from the rest of the UK.
Sequestration and bankruptcy are by and large the same process, the only difference being that one is a process within Scottish law and the other applies to England, Wales and Northern Ireland. However, they aren’t exactly the same, the following table will outline what the differences are and which you should be aware of.
- Must live in Scotland
- Must have £1500+ of outstanding debts that you cannot pay back
- Costs £200 to submit the application
- Must live in England, Wales or N. Ireland
- No minimum requirement for outstanding debts which you cannot pay back.
- Costs £680 to submit the application
However, each process shares more similarities than differences. For example:
- Both allow you to wipe off up to 100% of your outstanding debt.
- Both are legally-binding, meaning that we can take over all communications with creditors in full.
- Both can put your valuable assets, such as your car and house, in danger.
- Both will negatively affect your credit rating for a set period of time.
- Both can affect your employment in various industries and professions in the future.
As you can see, the main effects of both bankruptcy and sequestration are essentially the same. They are by and large the same process. If we recommend sequestration for someone in Scotland, if they were to teleport to England, all else remaining the same, we would be likely to suggest bankruptcy.
Undergoing the process of bankruptcy or sequestration can be a good way to make a financial fresh start, often leaving you with absolutely zero debt upon its conclusion. However, it is not a decision to take lightly and it is advisable to seek professional counsel first. If you are eligible for another debt solution, like a Trust Deed or IVA then this is much more advisable in most cases.
If you are having debt trouble and need advice on how is best to move forward, or still aren’t clear on the difference between bankruptcy and sequestration, then give us a call now on 0800 808 5124. One of our team of advisers is waiting to take your call and help in any way we can.
Alternatively, try our debt free life calculator. It just takes a minute, and can have you well on your way towards your financial fresh start.