What is Sequestration?
Sequestration (or Scottish Bankruptcy) is a formal process by which Scots can declare themselves unable to repay their debts, opting to forfeit control of their assets which will be sold in order to satisfy creditors (certain assets can often be protected, and you will be made aware of what is in danger before selling), wiping out as much as 100% of debt.
Sequestration is similar to a Trust Deed in many ways but does not require the level of disposable income that it takes to meet the requirements of a Trust Deed.
Am I Eligible for Sequestration?
In order to be eligible for sequestration, you must be in the following situation.
Unsecured debts include things like:
- You live in Scotland or have lived here within the last 12 months.
- You have outstanding debts of over £1500.
- You are unable to pay back these debts within a reasonable amount of time.
- You haven’t declared bankruptcy in the last five years.
- You are able to pay £200 for the sequestration application.
- You have the agreement of at least one of your creditors.
- You have an authorised certificate for sequestration (again, we can help with this).
You have an authorised certificate for sequestration. Your application must then be submitted to the Accountant in Bankruptcy for approval.
What Are the Advantages of Sequestration?
- Regain control of your finances by converting your unmanageable debt into a single reduced monthly payment.
- Once you have entered into the agreement your existing debt is frozen during the agreed term – no more fees, such as interest, can be added to the total.
- Put an end to creditor harassment; stop worrying about the phone ringing and the letter box opening.
- Protect your most important assets like your car and home.
- Creditors cannot undertake legal action to get money from you.
- Once all trust deed payments have been met, usually after around 48 months, all remaining debts to creditors included in the trust deed are written off.
- After a fixed term your credit rating will be reset, giving you more freedom to manage your finances in the future.