What is Sequestration?
In Scotland, the term “sequestration” is used to refer to the legal process equivalent to bankruptcy in other jurisdictions. It’s a formal insolvency procedure that involves transferring a debtor’s estate to a trustee, who then liquidates the assets to pay off the creditors as much as possible.
This process can be voluntary if a debtor is unable to pay their debts and chooses to petition for their own sequestration. It can also be involuntary if a creditor who is owed at least £3,000 petitions the court to sequestrate a debtor’s estate.
Once sequestration has occurred, the debtor is usually discharged from their debts after a year, though the trustee can continue to realize assets and make distributions to creditors for up to 4 years after the date of sequestration. There can also be restrictions on obtaining credit and starting a business during and after sequestration.
The benefits are that an insolvency practitioner will deal with your creditors on your behalf, stop contact from creditors, legal action and ensure repayments in a four year term are affordable.
It’s important to note that sequestration should be considered a last resort, as it has serious consequences, including a significant impact on credit rating.
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.
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.