Bankruptcy in Scotland is different from elsewhere in the UK and even has its own name: sequestration. So sequestration and Scottish bankruptcy are exactly the same thing. Before you make any decisions on your financial future get the facts first and then consider them in conjunction with your own personal circumstances. In addition to this we always advise that you seek independent debt advice to ensure you select the very best debt solution for your own particular circumstances.
What is bankruptcy?
Bankruptcy is a formal and legal method of solving a serious debt problem when your debts are at a level where you are unlikely to be able to repay them in a reasonable period of time. It enables you to agree an affordable single monthly payment to your creditors and write off your unaffordable debt.
How does it work?
The Accountant in Bankruptcy (AIB) administers the bankruptcy procedure on behalf of the Scottish Government. Bankruptcy can be applied for by an individual directly to the AIB or through a licensed insolvency practitioner who will advise on and administer the process for you.
How do you qualify for bankruptcy?
- In order to qualify for bankruptcy you must meet the following conditions:
- Your total debts must be at least £1500 and
- You cannot have been through the bankruptcy procedure in the last 5 years and
- You are required to pay a fee of £200 and
- You must satisfy at least one of the following:
One of your creditors agrees to you applying for bankruptcy
You meet the requirement of being ‘apparently insolvent’ which is a legal term that shows you can’t afford to pay your debts.
What are the requirements and consequences?
You agree to make a single monthly payment that you can afford to your creditors for up to three years
Your unaffordable debt is written off
- You are normally discharged from bankruptcy after a year
- At the end of the process you are debt free
- You must hand over your assets to your trustee who will use them to pay the fees and pay your creditors
- You are allowed to keep essential items such as clothes and furniture etc.
- Your credit rating will be affected and the bankruptcy will show on your credit report for six years
- All bankruptcies are recorded on the register of insolvencies
Bankruptcy is a last resort solution for debt problems and you should always seek professional debt advice to assess what options and alternatives are available to you. E-P Debt provide expert advice on bankruptcy and any alternatives to be considered. All advice is free and totally confidential.