Sharon McDougall - Updated - 30th January 2024 - 2 minutes to read
Being discharged from sequestration represents a key moment in becoming debt-free, and signifies the beginning of an improved financial situation. The sequestration process may appear to be relatively short at 12 months when compared with other official debt relief procedures, but it doesn’t necessarily mean the end of your obligations at this time.
Your Trustee remains in office until they have realised your assets, completed all administration relating to your case, and ensured that creditors have recouped as much of their debt as possible.
Bankruptcy in Scotland generally lasts for 12 months, after which time, if you’ve met all the terms and conditions you’ll be officially discharged. A specific form of sequestration, called the Minimal Asset Process (MAP), also exists for those with a low income and few assets, and its term is usually six months.
When you’re discharged from sequestration in Scotland you may have further financial obligations to meet, however, but this depends on your individual financial circumstances. In the case of a ‘standard’ bankruptcy rather than MAP, you might have to make ongoing payments to creditors, but in both cases you’re likely to face continued limitations on obtaining credit and other forms of borrowing.
Get a rough indication of what your monthly repayments might be under each of our different debt solutions.
Bankruptcy discharge – what happens next?
Although discharge from standard sequestration often takes place after a year, this isn’t necessarily the end of your financial commitment. You may need to repay creditors from your wages if you earn a regular income.
This formal arrangement is called a Debtor Contribution Order (formerly an Income Payment Order), and lasts for 48 months in total. At the start of the sequestration process, your Trustee uses the ‘Common Financial Tool’ to establish how much you can afford to contribute on a monthly basis, and this amount is factored in alongside the handing over of your assets.
In some cases, the Trustee can extend your bankruptcy term – if you haven’t co-operated fully in the process, for example, or failed to disclose information about new or existing assets.
One of the major consequences of sequestration in Scotland is the ongoing effect on your ability to obtain credit. Details of your bankruptcy remain on the Register of Insolvencies for five years, and on your individual credit file for six years.
Lenders may be reluctant to grant credit or borrowing for a considerably longer period of time, however. You’ll find that borrowing in general is more expensive, with limited access to mortgage deals and smaller items such as mobile phone contracts.
You aren’t automatically notified of your discharge from sequestration, but you can request confirmation from the Accountant in Bankruptcy (AiB) for a small fee. Your Trustee is discharged from their role when all creditor claims have been satisfied, and they have dealt with all your assets.
If you need more information about bankruptcy in Scotland, and what happens after you’re discharged, we can provide professional guidance and advice from our experienced team. Scotland Debt Solutions operate from five offices around Scotland, and offer a free same-day meeting to discuss your situation.
Borrowing money when you’re already deeply in debt requires careful consideration, and consultation with your trustee, as there are various factors associated with further borrowing in this situatio...
If you’re about to be discharged from a Trust Deed, you may be wondering to what extent your ability to obtain a mortgage has been affected.
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...
Why Choose Us
Speak Direct With
A Qualified Adviser
We Don't Operate
5 Offices in Scotland
Ask us About
Fully Regulated Advisors
From a Reputable Firm
Helping Scots Get
Out of Debt Since 1989
We'll give you a call
Our Scottish based team can help advise you on your debt problems.
Our personalised debt report will help you better understand your financial position and see where your money is going.
Arrange a call with an expert advisor at a time to suit you or contact our team via WhatsApp for immediate help and advice.
We can help you with...
Sequestration is the Scottish version of bankruptcy and may be suitable for you if you do not have the money to pay back your debtsFind out More
A Trust Deed involves making a monthly contribution to your debts for up to four years. After this time any remaining debt included in the Trust Deed will not need to be paid.Find out More
A Debt Arrangement Scheme (DAS) lets you pay off your debt through a series of manageable instalments over a reasonable length of time.Find out More
Our Insolvency Practitioners are regulated by ICAS or the IPA and our firm is authorised and regulated by the Financial Conduct Authority
Fees and Information: There are fees associated with our services. These will be fully explained before entering into any of the personal debt solutions referred to on this website. Full details of our fees and how these are charged are fully explained to you prior to you committing to any particular service.