What is Sequestration?
Sequestration, also known as full administration bankruptcy, is a formal insolvency process in Scotland that allows individuals who are unable to pay their debts to make a fresh start.
Sequestration involves transferring your estate (your assets and properties) to a Trustee, who is typically a licensed Insolvency Practitioner. The Trustee takes control of your assets to pay off as much of your debt as possible. Any remaining unsecured debts are usually written off at the end of the sequestration process, which typically lasts one year.
The Trustee’s role includes selling your assets (which can include your home, if you own it), and dealing with your creditors. Once sequestration is awarded, your creditors cannot take any further action against you to recover the debt.
Advantages of Sequestration
While sequestration is a serious decision with long-lasting implications, it offers several benefits:
- Debt Relief: Upon discharge from sequestration, the majority of your unsecured debts are typically written off.
- Creditor Protection: After the sequestration is awarded, your creditors cannot take any legal action against you.
- Fresh Start: Sequestration can provide you with a fresh financial start once your period of bankruptcy is over.
Sequestration has significant implications that need to be considered carefully:
- Credit Rating: It will severely affect your credit rating for six years, making it difficult to obtain credit.
- Asset Loss: You may have to sell valuable assets, including your home or vehicle, to help pay off your debts.
- Public Record: Sequestration is a matter of public record, and details of your bankruptcy will be published online in the Register of Insolvencies.
- Employment Impact: Certain jobs, particularly in finance or legal sectors, may be affected by your bankruptcy.
Your Expert Group, scottishtrustdeed.help, River Insolvency, ivahelper.co.uk are trading names of YEG Insolvency Limited which is Authorised Representative (FCA Number 987650) of Secure Financial Management Limited which is regulated by the Financial Conduct Authority.
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May not be suitable in all circumstances. Fees apply. Your credit rating may be affected.
Secure Financial Management Limited’s FCA number is 550186. You can confirm this by checking the financial services register by visiting the FCA website www.FCA.org.uk?register or by contacting the FCA on 0800 111 6768. The registered office is 89 West Regent Street, Glasgow, G2 2BA. Registered in Scotland company no: SC393839. Registered with the ICO under the Data Protection Number ZA328512
Donna Forey is Licensed to Act as an Insolvency Practitioner in the United Kingdom by the Institute of Chartered Accountants of Scotland.
A formal debt solution may not be suitable in all circumstances. Fees apply. Your credit rating may be affected.
*Debt examples are subject to creditor acceptance, payments are subject to individual circumstances, credit may be affected. Fees may apply.