Sequestration - Bankruptcy in Scotland

Sequestration involves the transfer of your assets and property into the hands of a Trustee for the benefit of the lenders. The Trustee in Sequestration has a duty to sell the assets/property. The Trustee may also seek a voluntary contribution from your income if you are in regular employment.

Self Sequestration

This can be done where you owe more than £1,500 and a lender has served:

• a Charge for Payment and fourteen days notice have elapsed or,
• a Statutory Demand and 21 days have elapsed or,
• an Earnings Arrestment as a result of a Charge for Payment.

If a lender has served none of the above, then the agreement of a lender (or lenders) is required.

Advantages

• Your lenders will no longer be able to pursue you or take action against you to recover what you owe.
• You will not have to make further payments to your lenders.
• You may expect to be discharged after 3 years and will then be free of debt (unless you have accumulated any new debts since the date of your Sequestration).

Disadvantages

• If you own any valuable property, including life assurance policies, you will probably lose them.
• If you own your own home you will probably lose it.
• If you are in paid employment you may have to make a contribution.
• If you acquire any money or property after the date of your Sequestration and before the date of your discharge you will have to surrender it to your Trustee.
• While you are sequestrated it will be unlawful for you to incur credit of more than £250 unless you tell the new lender that you are an un-discharged bankrupt.
• Your Sequestration will be noted by the Credit Referencing Agencies and you may have difficulty in obtaining credit even after your discharge.

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