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Find out if you are eligible to write off your unsecured debts*

  • Lower your monthly payments
  • Stop creditor pressure
  • Write off debts you can't afford

What Is Sequestration?

Sequestration is the Scottish legal term for bankruptcy, Sequestration is an option if you are unable to repay your debts as they fall due and can allow for up to 100% of your debts to be written off.

A licensed Insolvency Practitioner (Trustee) would take control of your assets and collect an income contribution, if affordable, towards the insolvent estate for a 4 year period.  Sequestration is an alternative to other forms of debt relief such as the Debt Arrangement Scheme (DAS) or a Scottish Trust Deed.

Are you Eligible For Sequestration?

To apply for full administration sequestration, you must meet the following criteria:

  • You currently lives in or has lived in Scotland within the last 12 months, or have a place of business in Scotland
  • You have debts of over £3,000
  • You have Apparent Insolvency and/or you are unable to pay your debts as they fall due and have been granted a Certificate for Sequestration by an authorised person
  • You must have received advice from an Approved Money Advisor
  • You have not made yourself Bankrupt in Scotland within the last 5 years
  • Pay the application fee of £200 to the Accountant in Bankruptcy (AiB)

What are the qualifying conditions for Minimum Assets Process?

To apply for MAP, the client must meet the following criteria:

  • You must owe a total debt of at least £1,500
  • You must not owe more than £17,000
  • You do not own a single asset worth over £1,000 (this excludes a vehicle which does not exceed £3,000 and is reasonably required)
  • The total value of assets do not exceed £2,000
  • You must have received advice from an Approved Money Advisor
  • You must be living in Scotland or have lived in Scotland within the last 12 months
  • You must not have been made bankrupt in the last five years
  • You must not have been made bankruptcy through the Minimal Asset Process within the last 10 years
  • You must pay the application fee of £90 to the AiB
  • You must have a certificate for sequestration signed by an authorised person
  • You must have been in receipt of benefits only for the last six months; or
  • A money adviser has assessed your income and expenditure using the common financial tool and you have no surplus to pay an income contribution.
  • You do not own any land or property

How much does Sequestration cost?

You must pay an application fee of £200 (Full administration)/£90 (MAP) to the Accountant in Bankruptcy when applying for the sequestration.

The Trustee’s fees and costs are then met from the funds received into the Sequestration through the realisation of assets and the monthly contribution; there are no payments due by you over and above the agreed contributions from the income and/or the assets.

We do not charge set up fees and we would advise against using any company who does. Creditors are given the opportunity to object to the level of the Trustee’s fee at each anniversary of the sequestration.

There is no cost to you if you decide against making a sequestration application after having taken advice from one of our advisers

Sequestration Process

If you decide sequestration is the best option, you would complete an application form and send it to the AiB.  Once the sequestration has been awarded you are protected from any creditors taking legal action for the recovery of debt.

The Trustee’s main duty in the sequestration is to take control of your assets and, if required, realise them for the benefit of the creditors.  The Trustee will also collect any contributions payable as set by the AiB at the application stage.

Your disposable income is reviewed and a contribution is set for a 4 year period using a Debtor Contribution Order (DCO).  The DCO is subject to review at every anniversary of the bankruptcy.  Both duties are very similar to the responsibilities assumed by a Trustee under a Trust Deed.

You are discharged from Sequestration normally after 1 year, subject to co-operation and asset realisation; however, if you can afford a contribution then you will be required to make a monthly payment to the sequestration for a period of 4 years, as described above.

What happens to my home and car in sequestration?

Your home:

In sequestration it is possible to keep your home although that is unlikely if you have significant equity, if not selling you may need to release some of the equity for creditors as part of the process.

If you are a home owner, the level of equity (difference between the value of the house and any loans secured on it) is calculated and the Trustee will be required to realise that amount for the benefit of creditors.

If there is significant equity in the client’s home then it is likely that you will need to sell the property to realise the equity for the benefit of creditors.   However, it is not automatic that the client’s home will be sold, unless the client wants to do so.

Equity, if applicable, can be realised by the following methods:

  • Third party payments e.g. family, friend, business associate etc.
  • Extending the payment period of the sequestration
  • Re-mortgage or secured loan
  • Mortgage to Rent scheme
  • Sale by private bargain or open market

If the home has negative/nil or minimal equity then the Trustee may request a nominal sum to relinquish his/her interest in the home.  This payment would normally be £550 as per the AiB guidelines.

Your car:

In most cases you will be able to keep the car, especially if it is required for work purposes.  If the car is valued at less than £3,000 then it will not be considered as a realisable asset of the sequestrated estate.

If the car is brand new and/or worth a significant amount then you may have to trade it in for a less expensive car, releasing either income or a lump sum to the sequestration.

If the car is subject to a Hire Purchase agreement or another type of secured finance agreement, you will be allowed the contractual repayment within the monthly expenditure (provided it is not excessive) and, in most cases, you will be able to keep the car.

Sequestration Advantages


  • 100% debt relief is possible
  • Creditors do not have an opportunity to reject the Sequestration
  • Once sequestrated, creditors cannot take legal action to recover their debt
  • You no longer have to deal with the creditors – the Trustee will do this for you, taking away the pressure of the constant phone calls and distressing mail
  • Interest, fees and charges are frozen – the creditors can only claim for the outstanding balance due as at the date of sequestration
  • If you are asked to pay a contribution, then it will be an affordable monthly payment that is calculated after an allowance has been made for all the general living expenses and household bills

Sequestration Disadvantages

  • Assets of a significant value are likely be sold for the benefit of creditors
  • You are unable to act as a director of a limited company or be involved in the formation, promotion or day-to-day financial management of a limited company.
  • It may harm your employment prospects both now and in the future – legal advice should be sought
  • Student Loans are not discharged by Sequestration
  • There will be an adverse effect on your credit rating
  • £200/£90 application fee to be paid to the Accountant in Bankruptcy
  • You must declare that you are bankrupt to any person that you attempt to obtain credit from, either alone or in a joint application, where the credit amount totals £2,000 or more, or in all circumstances where you already have debts totalling £1,000 during the period of the bankruptcy.  You must also declare your bankruptcy for a period of 6 months following your discharge from a MAP bankruptcy.
  • Unable to act as a Member of Parliament or a Justice of the Peace.
  • An individual may be in breach of certain contractual obligations by being made bankrupt e.g. tenancy/lease agreements, various licences, employment contracts, HP agreements etc – legal advice should be sought.
  • Bankruptcy has a 4 year acquirenda term i.e. the trustee has claim on assets acquired for a period of 4 years from the date of sequestration e.g. inheritance

Sequestration Help & Advice

If you would like to receive further advice about what debt solution might be right for you, speak to one of our friendly advisors today by calling 0808 253 3433, or text ‘ADVICE’ to 60060

Write off debts you cant afford
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