What is sequestration?
Sequestration is just bankruptcy under Scottish Law. It can allow you to clear huge amounts of debt which would otherwise take years to clear in their entirety. By becoming responsible for your assets we will manage them in order to gather money which will satisfy your creditors. It isn’t a certainty that your home will be sold, although it isn’t unlikely. If possible, we will also distribute some of your income to creditors. We can also take over all communications with your creditors putting an end to their harassment.
In many ways, sequestration and a Trust Deed operate in the same way. However, you do not need any certain amount of disposable income in order to enter sequestration.
Am I eligible for sequestration?
To apply for sequestration you must meet certain criteria. If you are unsure about anything it isn’t a problem, just give our team a call and we can work everything out for you. We will then be there to help you throughout the procedure, until your debt is cleared.
The criteria you have to meet include:
- You must live in Scotland, or have done so within the last year.
- Your outstanding debts must be over £1500.
- You do not have the money to pay these debts back in a reasonable amount of time.
- You can’t have gone through a bankruptcy procedure in the last five years.
- You have to be able to pay £200 to pay for the process.
- At least one of your creditors has to agree to the terms.
- You have to be have granted an authorised certificate for sequestration, although we will help with this part of the process.
Once it is completed, we will submit it to the Accountant in Bankruptcy to be approved.
How does the sequestration process work?
When broken down, applying for sequestration is a series of manageable stages.
Step 1: The first thing we’ll have to do is to get an idea of your financial circumstances. Once we understand your situation we will work out how much you can realistically put towards satisfying creditors.Remember, that any information our team offers you is free and of zero-obligation. If you don’t like what we have to say you don’t have to take things any further, and you won’t be charged a penny.
Step 2: Once everything is ready we will submit it to the Accountant in Bankruptcy (AiB) who will appoint a Trustee after approving it. Most of the time we will become your Trustee, as we are your insolvency practitioner. The AiB will then determine how much money you can pay over the following years (typically four) by analysing your income.
Step 3: By this step everything will have been approved and we will be your official trustee. From this point we will handle all communications with your creditors and let them know if there are any developments in your financial situation.
We will also inform all of the relevant parties how your assets will be managed. However, this will have been explained to you first before the application was even submitted.
Step 4: Provided you have fully cooperated and met all the agreed terms, after just one year you will be discharged from your bankruptcy by the AiB. You will likely have to continue to pay the agreed contribution until the whole sequestration process has been concluded, which could take another three years. As your trustee, we will still provide support during this phase.
After the entire process is finished you will be debt free, and can focus on rebuilding your financial situation from there!
What are the advantages of sequestration?
- It is possible to wipe off every penny of your debt through sequestration.
- You can still qualify even if you don’t have the income required for other processes, such as a Trust Deed.
- Any regular sums you are asked to pay will be based entirely on what you can afford. It will be realistic to meet these payments every month.
- Throughout the process any additional charges and fees will be frozen. Creditors can only expect to be repaid what they were owed when the process officially began.
- Money you receive through benefits will remain unaffected by the procedure.
- Sequestration is legally binding, which means we have the authority to handle communications with your creditors. They will no longer be able to call or send any letters to you.
Declaring bankruptcy can be a scary proposition, and not something to be taken lightly. However, in many cases it can be a very positive way of moving your finances forward. Remember, continuing to struggle against creditors while barely keeping your head above water isn’t process – a formal debt solution is.
Nonetheless, it is essential that you seek out some form of professional guidance before making any decisions. Our team is on-hand to deliver clearly understandable information on the process, and answer any and all questions you might have. Pick up the phone today and join thousands of people across the country in taking back control from creditors.
Call us on 0800 808 5124 for more information.