Can I apply for my own sequestration?

March 22, 2017

When you’re struggling to repay unsecured debt and see no way out of a dire financial situation, personal bankruptcy can seem like the only option. This process is known in Scotland as sequestration, and involves handing over your assets to a Trustee who sells them in order to repay your creditors.

It is possible to apply for your own sequestration under certain conditions, and for some people this is the only way to bring to an end a period of significant worry and stress. There are two different avenues into sequestration when applying for yourself, one of which is called the Minimal Asset Process, or MAP.

Both routes have specific eligibility criteria, and need the input of an approved money advisor to identify whether there are better alternatives available that would help you deal with your debt.

To enter sequestration under the full administration route, as opposed to MAP:

• Your debts must total £1,500 or more
• You have to live in Scotland
• You must not have been sequestrated during the previous five years
• You must have received advice from a qualified money advisor who has issued you with a Certificate of Sequestration

Applying for your sequestration under the Minimal Asset Process

• Your unsecured debts must total more than £1,500, and less than £17,000
• You must be resident in Scotland
• Your assets must not be worth more than £2,000, with no single asset being valued at over £1,000
• You should not own any property or land
• You must not have been sequestrated via MAP within the last ten years
• You need to have been receiving benefits for a minimum of six months, or have been assessed by a money advisor as unable to make a financial contribution to your creditors

Applying for your own bankruptcy in Scotland

The process of applying for sequestration is relatively straightforward, and involves the completion of a debtor’s petition form. This form is sent to the court along with the Certificate of Sequestration which proves your insolvency – the certificate is valid for 30 days from the date of issue.

Your money advisor will be able to assist you in completing the form, and advise on procedures once the court has granted your sequestration.

What are the advantages of applying for your own sequestration?

• Sequestration removes the considerable stress and worry of creditor action, as all unsecured debts are written off when you are discharged
• It allows you to start afresh financially
• You don’t need to contact your creditors again, as your Trustee deals with them
• If circumstances change and your disposable income drops, financial contributions can be adjusted accordingly

Disadvantages of choosing sequestration

• Your major assets may come under the control of your Trustee
• Sequestration affects your credit rating for six years or more
• It is a public process, and will be recorded in the Register of Insolvencies
• Your job may be affected as some employers don’t allow their employees to get into debt
• Not all unsecured debts can be included when you are sequestrated
• Any windfalls or other significant financial gains such as an inheritance, may need to be paid over to your Trustee during the period of sequestration

Scotland Debt Solutions works solely on behalf of Scottish residents and can offer further guidance on the sequestration process. Call one of our experts to arrange a free same-day meeting in complete confidence at one of five offices around Scotland.

John Baird

Insolvency Adviser

Tel: 0800 063 9250

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