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Actual Case
"Mr & Mrs B of Newcastle upon Tyne were in significant arrears paying £800 per month on unsecured debts of £28k. They now pay an affordable monthly payment of £270 and will be completely debt free in 60 months..."
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Sequestration - Bankruptcy in Scotland
Sequestration is the Scottish legal term for personal bankruptcy where you are formally declared Bankrupt by the Court. Sequestration involves the transfer of your assets and property into the hands of a Trustee for the benefit of the creditors.
The Trustee in Sequestration has a duty to sell the assets or other property if there is any financial benefit to creditors. The Trustee may also seek a voluntary contribution from your income if you are in regular employment.
You can apply for your own sequestration if you owe more than £1,500 and a creditor has served either;
- A Charge for Payment and fourteen days notice have elapsed or,
- A Statutory Demand and the required 21 days have elapsed or,
- An Earnings Arrestment (sometimes also known as an Attachment of Earnings) arising as a result of a Charge.
Alternatively if none of the above has occurred then you will need the permission of one of your creditors.
Like a bankruptcy in England and Wales; sequestration has the following advantages;
- Creditors will no longer be able to pursue you or take action against you to recover your debts.
- No further payments are made to the creditors.
- You will normally expect to be discharged after a maximum of 3 years and will then be completely debt free.
However there are a number of disadvantages to this course of action;
- If you own any valuable property, including life assurance policies, you may lose them.
- If you own your own home you could 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.
However, before you consider applying for sequestration you should consider all of your financial options.
Legislation exists in Scotland to provide for something called a Protected Trust Deed.
The legislation has been specifically designed to help those consumers in Scotland with overwhelming debts, who can no longer afford to continue making their payments.
If you want to know more about how a Trust Deed may help solve your debt problems then simply complete our enquiry form or contact us today on 0800 043 50 43 for the latest completely independent Scottish bankruptcy advice.
Alternatively if you have any specific questions about Sequestration and Trust Deeds then fill in the below form. Just enter your query and one of our groups impartial debt advisors will get back to you.
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