What is Sequestration?
It is the Scottish term for Bankruptcy, a formal arrangement to deal with debts that you are unable to repay with within a reasonable period. (Scottish residents only)
To qualify, you must have debts of over £3000 and have a certificate for this debt plan. Charge for Payment or Summary Warrant. In addition, you must not have been made bankrupt in the past 5 years.
During the sequestration process, a Trustee is given control of all your assets with an option to sell them to pay off your creditors which include:
- Your car
The Trustee can also request a contribution from your income during the sequestration period.
Advantages of Sequestration
- Once you have been sequestrated, included creditors are unable to pursue you or take any legal action against you to recover what they are owed
- Your Trustee (this may be an IP or the Accountant in Bankruptcy) will contact your creditors on your behalf
- Provided you co-operate fully, the Accountant in Bankruptcy may grant your discharge at the end of one year
- If you are receiving welfare benefits, these will not be classed as income for the purpose of calculating your monthly contribution
- Your included debts will be written off once you have been discharged
Disadvantages of Sequestration
- Your sequestration will be displayed on an online Register of Insolvencies, which the public can search
- Your credit rating may be affected and sequestration may affect your ability to obtain credit in the future
- If you are given money as a gift, you must inform your Trustee. Depending on the amount, you may be required to make this available for your creditors
- The fee for sequestration, paid to the Accountant in Bankruptcy, is £200
- If you are a homeowner or have assets these could be sold to pay towards your debts
Sequestration Help & Advice
If you think this debt plan could be the right solution and you want to know more, contact National Debt Centre to speak with one of our team and see which debt plan is appropriate for you and your situation.