What is Sequestration?
Sequestration is a formal solution and only applies to individuals, whether in a personal or business (i.e. sole trader, partnership, unincorporated business etc) capacity, who cannot pay their debts when they are due. Many people can fall into this category and sequestration is one of a number of options available.
You can apply if you’ve received one of the following:
- A certificate for sequestration issued from an approved debt advisor.
- A charge for payment served on you and the 14 days allowed for payment have passed without you making a payment
- A summary warrant to recover rates or taxes and an attachment or an exceptional attachment order has been made against items you own and the 14 days allowed for payment have passed without you making a payment.
Your sequestration is administrated by a trustee who acts for the creditors and realises the assets (such as house, car etc) before distributing the proceeds to creditors with unsecured debts being written off.
Sequestration normally lasts for one year, after this period you may be discharged. Although you may receive your discharge, if in a position to do so, you will be required to make a monthly contribution for up to 48 months and continue to co-operate with your trustee. Your monthly contribution will be agreed using the common financial tool and your details added to the Register of Insolvencies (ROI) which is a public record and may affect your credit rating.
When to consider Sequestration
Sequestration may be suitable for you if all of the following apply:
- you cannot see a way to pay your debts
- you do not have many assets
- it is unlikely that your situation will improve
Before you can apply for sequestration you need to:
- owe more than £3,000
- be living in Scotland or have lived in Scotland sometime during the last year
- not have been made bankrupt in the last 5 years
- pay the application fee of £200.
Your Insolvency Advisers
We have extensive knowledge and experience in acting as trustee on sequestration cases. Our approach will be commercial and pragmatic. We ensure that we take full account of the interests of creditors whilst being fair and reasonable at what will inevitably be a difficult time for the individual being sequestrated.
We will complete a full review of your individual circumstances which, for businesses, includes the legal nature of the company, an analysis of its trading position and the effect of any partnership agreements.
Having completed a monthly income and expenditure we recommend and agree a monthly amount available to pay towards creditors and assist you in completing all documentation required for petitioning for a bankruptcy. Once we are approved we will administer the sequestration and manage on-going communications with creditors.
For Scottish debt help, see also:-
You may also be interested in considering the following related pages if you live in Scotland:-
- Debt Arrangement Scheme
- Business Debt Arrangement Scheme
- HMRC Aggressive Tax Planning Claims
- Protected Trust Deeds
Sequestration & Bankruptcy Advice Glasgow & Edinburgh, Scotland
We understand that facing up to financial challenges can be an extremely difficult and stressful time. However, you should be reassured to know that there are options available and, with the right advice and support, you can take the necessary steps to improve your situation. For more information on sequestration & bankruptcy, please contact us at an office near you.