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.
Your personal credit score plays an important part in securing new loans and credit, and can affect your financial life for better or worse. Lenders use the information in your credit file to determine whether you present a high risk of default, and if your credit score is low, you may find it difficult to […]
Credit unions offer a range of financial products including current accounts, savings accounts, and loans, and can be a good alternative to banks and building societies whilst also helping your cash flow. There are credit unions all around the UK, almost 100 of them operating in Scotland. They’re not always widely advertised, however, and although […]
It’s a worrying situation when you realise your outgoings exceed your income, and it can be difficult to prevent debt in this situation, but there are solid steps you can take to get back on track – you just need to act quickly. Increasing your income or reducing the money going out are essentially what […]
If you’ve lost your job, state benefits and tax credits can provide vital financial support to see you through this tough time and help you avoid taking on too much debt while you look for more work. As far as your old employment is concerned, it’s important that you check your final wage slip to […]
If you are a Scottish resident in financial difficulty, you may have entered into a Trust Deed in order to restructure debt repayments to creditors. A Trust Deed is a fixed voluntary agreement made between the debtor and creditor, with the help of a trustee. Debt is broken down into smaller, affordable instalments, typically lasting […]
A Debt Arrangement Scheme (DAS) is a government backed scheme which allows you to repay debt through contractual, monthly instalments without the threat of legal action and incurring penalties or interest. The scheme was established in 2004 for Scottish residents in debt, providing an alternative solution to sequestration, the Scottish equivalent of bankruptcy. A Debt […]