Sequestration typically lasts for a period of 12 months, although if you’re also paying a Debtor Contribution Order (DCO), repayments can continue for a further three years after discharge.
There’s also a form of sequestration in Scotland called the Minimal Asset Process, or MAP, and this lasts for six months. MAP is a type of sequestration designed to help people on low incomes and with few assets to escape unmanageable debt.
A further factor to consider with regard to discharge dates is that if you’ve not cooperated with the Trustee during the sequestration process, they can request that your discharge is delayed.
Non-cooperation in this respect means deliberately refusing to provide information that’s essential for the Trustee to do their job, or maybe hiding assets that could be used for the benefit of creditors, as opposed to common issues such as genuinely not being able to provide historic receipts or documentation for your assets.
The Trustee has three years from the date of your bankruptcy to begin the process of selling your home. Whether or not your property is sold after sequestration largely depends on how much equity it holds. If there is less than £1,000 of equity, it won’t be financially worthwhile for the Trustee to sell it and the beneficial interest in the property will return to you.
Inheritances, windfalls, and insurance claims
Any money you inherit or windfall payments you receive may be claimed by the Trustee and used to repay your creditors up to three years following the end of your sequestration. It’s also worth knowing that after your discharge, any legal right to make a claim, such as a PPI claim, passes to the Trustee.
One of the most significant impacts of sequestration is on your credit file, and your bankruptcy is noted here for six years. Your creditors should update your credit file when you’re discharged to show that you no longer owe any money, but lenders will still be able to see that you’ve been sequestrated, which can cause severe problems when trying to obtain borrowing.
You’ll need to obtain a letter of confirmation that you’ve been discharged from sequestration if you do apply for borrowing, as lenders will need to see proof that you’ve been discharged and that you’re not subject to a Bankruptcy Restriction Order (BRO). You can start to rebuild your credit rating after sequestration has ended, however, and slowly build up a better credit record using credit builder credit cards and other methods.
If you would like more information on how to do this, or on any other aspect of sequestration, please contact our team of experts at Scotland Debt Solutions. We specialise in helping Scottish residents get out of debt, and can arrange a free same-day meeting at any of our offices around Scotland.
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