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Bankruptcy In Scotland

For people in Scotland struggling with unmanageable debts, sequestration may be the best option. Sequestration is the Scottish equivalent of Bankruptcy, a formal arrangement to deal with debts that you are unable to repay with within a reasonable period of time.

Customers can get free debt counselling, debt adjusting and providing of credit information services from the Money Advice Service – an organisation set up by the Government to offer free and impartial advice to those in debt. For more information from the Money Advice Service click here
You can find. Government guidance on dealing with your creditors here.

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What is Sequestration?

Sequestration is the Scottish equivalent of Bankruptcy. You must owe more than £3,000 to your creditors and be unable to pay your debts.

Assets you own, such as your house or car may be sold to pay off your debts. You may also be required to make payments for up to 4 years.

Sequestration may have serious implications and the decision to enter sequestration should not be taken lightly.

Debts which can not be included in sequestration:

  • Magistrates court fines
  • Child support and maintenance
  • Student loans
  • Social fund loans
  • Compensation for death and injury.
  • Confiscation orders

Please be aware that lenders are not obliged to accept less than contractual, payments or to freeze interest and charges. This may result in an increase in the total, amount repayable and may affect your credit rating.

Pros & Cons of Sequestration

Advantages of Sequestration

  • Once you have been sequestrated, included creditors are unable to pursue you or take any legal action against you to recover what they are owed
  • Your Trustee (this may be an IP or the Accountant in Bankruptcy) will contact your creditors on your behalf
  • Provided you co-operate fully, the Accountant in Bankruptcy may grant your discharge at the end of one year
  • If you are receiving welfare benefits, these will not be classed as income for the purpose of calculating your monthly contribution
  • Your included debts will be written off once you have been discharged

Disadvantages of Sequestration

  • Your sequestration will be displayed on an online Register of Insolvencies, which the public can search
  • Your credit rating may be affected and sequestration may affect your ability to obtain credit in the future
  • You may have to make payments for up to 4 years.
  • The fee for sequestration, paid to the Accountant in Bankruptcy, is £200
  • If you are a homeowner or have assets these could be sold to pay towards your debts

Sequestration Help & Advice

If you think sequestration could be the right solution for you, or wish to avoid sequestration, The Money Group Ltd may be able to help you today.

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