routes out of personal debt
Sequestration (Bankruptcy) is a formal solution and only applies to individuals, whether in a personal or business (i.e. sole trader, partnership, unincorporated business etc) capacity, who cannot pay their debts when they fall due. Many people can fall into this category and sequestration is one of a number of options available.
You can apply if you’ve received one of the following:
- A certificate for sequestration completed by an individual with the relevant authority
- An expired charge for payment
- An expired summary warrant
Your sequestration is administrated by a trustee who acts for the benefit of creditors and will realise assets (such as house, car etc) where applicable, before distributing the proceeds (a dividend) to creditors. Any unsecured debts that remain, are written off.
The Sequestration process normally lasts for four year, after one year if you have cooperated with your trustee, you may receive your discharged. Although you may receive your discharge, if in a position to do so, you will be required to make a monthly contribution for up to 48 months and continue to co-operate with your trustee. Your monthly contribution will be agreed using the common financial tool and your details added to the Register of Insolvencies (ROI) which is a public record and may affect your credit rating.
When to consider Sequestration
Before you can apply for sequestration you need to:
- owe more than £3,000
- be living in Scotland or have lived in Scotland sometime during the last year
- not have been made bankrupt in the last 5 years
- pay the application fee of £200.
We have extensive knowledge and experience in acting as trustee on sequestration cases. Our approach will be commercial and pragmatic. We ensure that we take full account of the interests of creditors whilst being fair and reasonable at what will inevitably be a difficult time for the individual being sequestrated.
We will complete a full review of your individual circumstances which, for businesses, includes the legal nature of the company, an analysis of its trading position and the effect of any partnership agreements.
Having completed a monthly income and expenditures, we can assist you in completing all documentation required for petitioning for a bankruptcy. Once we are approved we will administer the sequestration and manage on-going communications with creditors.
Further information can at the Accountant in Bankruptcy (AIB) website: https://www.aib.gov.uk/bankruptcy