If you’re filing for sequestration, you’ve probably been pursued by creditors or debt collection agencies for some time, and may view bankruptcy as the best way out of serious debt.
When a debt collection agency is chasing you, it doesn’t stop you filing for sequestration, but it doesn’t necessarily mean they have to stop in their attempts to recoup the debt. This depends on the type of debt involved, as some fall outside the scope of bankruptcy orders.
Before you file for bankruptcy in Scotland, it’s important to check that you meet all the conditions and requirements. An insolvency practitioner (IP) or approved money adviser can assess your eligibility by reviewing the level of your debt, income and outgoings.
You’ll receive a certificate of sequestration from your money adviser or licensed IP to demonstrate that you’ve met these conditions, and be able to prove your insolvency to the Accountant in Bankruptcy (AiB) by sending the certificate along with your application.
The certificate expires after 30 days, however, so it’s advisable to act quickly in this respect. Essentially, a certificate of sequestration confirms that you owe £1,500 or more in unsecured debt, are unable to pay your debts, have not been bankrupt during the past five years, and are resident in Scotland.
The debt collection agency chasing you won’t be able to prevent you from filing for sequestration, and in many cases cannot pursue you for the money once you’re officially bankrupt.
Those chasing payment of credit card or store card debt, for example, must contact only your Trustee with regard to the money that’s owed. This is one of the major advantages of filing for your own sequestration, as harassment from creditors and debt collectors can be relentless.
Other unsecured creditors face the same restrictions, and cannot stop you from declaring yourself bankrupt - these unsecured debts could include bank overdrafts and personal loans, payday loans, and catalogue debt.
There are several factors to consider in relation to ongoing contact from debt collection agencies when you’ve filed for bankruptcy:
Scotland Debt Solutions can provide the professional advice you need when facing unmanageable debt. We’ll advise on your rights if a debt collection agency is chasing you, and assess whether there are any better alternatives to sequestration. We work from five offices around Scotland, and can arrange a confidential same-day meeting free-of-charge.
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Credit card debt is unsecured so you don’t need to worry about any of your assets being repossessed, but getting behind with credit card repayments can still cause an alarming spiral into debt.
Our Scottish based team can help advise you on your debt problems.