How can I apply for bankruptcy in Scotland?
January 3, 2018
If you’re in serious debt with no hope of repaying your unsecured creditors, you don’t have to wait for a creditor to take legal action against you. You may be able to take matters into your own hands and apply for sequestration (bankruptcy in Scotland). This also prevents your situation from worsening.
There are two ways you can apply for your own sequestration in Scotland:
- Minimal Asset Process (MAP)
- Full administration (or standard bankruptcy)
In both cases an approved money adviser or licensed insolvency practitioner (IP) should assess whether or not you’re eligible for the process, and help you complete the application form.
When completing the form, you’ll need detailed information about your finances, and will have to submit documents in support of your application.
How to apply for sequestration
The application form for sequestration can be completed and submitted online, which considerably speeds up the process, but if you prefer you can print off or request a paper copy.
A Debtor Bankruptcy Application Pack is available from the Accountant in Bankruptcy (AiB) website, with the application fee for full administration being £200. If you’re eligible for the Minimal Asset Process, the fee is reduced to £90.
Completing the sequestration form
Certain sections of the application form relate only to the Minimal Asset Process. Should you declare that you meet the MAP criteria but are later found to be ineligible, you’ll have to use the ‘standard’ sequestration process and pay an additional application fee.
If you don’t meet the conditions for entering MAP bankruptcy, your money adviser or insolvency practitioner will issue a certificate of sequestration. This is valid for 30 days, and must be submitted with your application form and sequestration fee to the Accountant in Bankruptcy.
If sequestration is approved
Once the Accountant in Bankruptcy has received an application they usually reply within five working days, but this can be longer if any information or the required documentation hasn’t been provided.
When the application is approved, your assets pass to the control of your trustee whose role it is to sell them for the benefit of your creditors. The trustee must be a licensed insolvency practitioner, and you can enter their details on the application form.
Although you may be discharged from sequestration after 12 months (six months for MAP bankruptcy), the trustee will continue with the process of realising your assets and distributing the proceeds to creditors.
You’ll need to cooperate with the trustee throughout this procedure, so your obligations under sequestration don’t generally end when you’re discharged, unless the administration of your bankruptcy is minimal.
For more information on applying for your own bankruptcy in Scotland, and for assistance in completing the process, call our licensed insolvency practitioners at Scotland Debt Solutions. We specialise in helping Scottish residents to escape debt, and can offer a free same-day meeting to establish your needs.
The start of a new year is the perfect time to take stock of your finances and put plans in place for a financially savvy year ahead. While you may feel your problems are insurmountable, there are always things you can do to help, most of them surprisingly easy. Here are 7 ways you can […]
If you have credit card debt which is attracting a high level of interest, moving this balance onto a lower interest card could save you a considerable amount of money. This process is known as a ‘balance transfer’, and if done correctly, this process could save you money and also reduce the time it takes […]
Many thousands of young Brits are being actively encouraged towards taking on debt and spending borrowed money even before they reach their 18th birthdays. That’s according to the price comparison website comparethemarket.com, whose research suggests that roughly one in four 16 and 17 year olds in the UK have been offered credit cards or asked […]
If you’re looking to save some money it’s a good idea to make a detailed budget that lets you see where your cash is currently being spent, and offers an overall view of your finances. You’ll need to collect together your income and expenditure details, including annual costs such as insurance, car expenses, birthdays and […]
Scotland has a number of formal debt solutions that can help you deal with a difficult financial situation. It’s advisable to take action as soon as possible, however, to prevent your levels of debt escalating when interest and other charges are added. Obtaining professional advice is key in this respect. An approved money advisor or […]