Scotland’s Trust Deed offers advice on several debt management options which includes Sequestration or bankruptcy as most people know it. If you decide to take this step towards financial freedom, then we will support you throughout the process.
However, very careful thought needs to be given to sequestration or bankruptcy process, particularly the implications for doing so.
Do you qualify for sequestration?
Sequestration is for people who have the most serious financial issues, a high amount of debt combined with a limited ability to pay it back.
- You must live in Scotland or own a business here.
- Your debt must be over £3,000.
- Insolvency must have been declared. This is where it is decided you cannot pay your debts when they are due.
- A previous sequestration must not have occurred in the previous five years.
A step by step guide to Sequestration
There are two types of sequestration
- Minimal Asset Process (MAP) which is for people with low income and few assets
- Standard sequestration for people who own a home or business.
Your adviser at Scotland’s Trust Deed will work closely with you on the sequestration process.
If you qualify for sequestration, your adviser will give you a certificate of sequestration and it will be valid for 30 days.
The application form and certificate will both be sent to the Accountant in Bankruptcy (AiB). They will approve or dismiss it and you will usually know within five days.
Once approved, your creditors will no longer be permitted to contact you.
Application for sequestration
Once the application for sequestration has been given the green light, a trustee will gain control of your assets. The trustee may sell the assets and the money raised will be shared out equally between your creditors.
Sequestration usually lasts 12 months – after that, you will be discharged. However, you must still communicate with and act on the advice of your trustee after discharge. Depending on your circumstances, your assets may continue to be sold after the 12 months.
After sequestration, your remaining debts will be written off and the creditors will not be allowed to contact you.
The disadvantages of sequestration
Your sequestered status will be available to the public via the online register.
Your credit file will be damaged for six years and it will be hard to get credit for mortgages, phone contracts and credit cards.
Any company directorships must end during the period of sequestration. It may also have an impact on your current and future career. Scotland’s Trust Deed advise checking your employment contract before applying for sequestration, especially if you work in the financial industry.
You may lose your assets such as your home and car which could be sold to pay your creditors. For many owners of property going ahead with sequestration is the absolute last resort.
Contact Scotland’s Trust Deed to discuss with our expert team of debt advisors whether sequestration is the right decision for you.