The 6 Steps To Apply For Sequestration (Scottish Bankruptcy)

So you’ve made the decision to apply for sequestration. You’ve taken advice and considered all the options, you know you meet the criteria, what the potential impact will be on your life in the future, possibly even your career and you want to go ahead.

 

Well...how exactly do you do that?

Step 1: Prove You Are Insolvent

Knowing you are insolvent is not enough – you have to prove it and there are several ways of doing that;

  • A creditor issues you with a Charge for Payment and you leave it unpaid
  • You signed a Trust Deed, but your creditors refused to let it become protected
  • You have a Certificate of Sequestration from an approved Money Adviser or Insolvency practitioner who looked at your financial paperwork and agreed you are insolvent
  • You meet the Low Income, Low Asset criteria to apply for sequestration

Step 2: Get All Of The Forms

The AiB publishes sequestration forms on its website here. There are a number of pages of notes you need to read beforehand and you will need all of your financial paperwork to hand before filling in the forms. The information is quite detailed so it pays to start collecting it up a few days in advance in case you need to ring a lender and obtain any of the information.

Step 3: Evidence And Payment

Each application for Sequestration comes with checklists to make sure you have carefully considered everything and included the evidence required for the AiB to make a decision. Without it, the AiB cannot grant your Sequestration. Don’t forget to sign and date everything, as missing anything here could mean your application is delayed or not processed.

 

Once the evidence is taken care of, you need to be able to pay the fee. This can be done before you apply (either in person at AiB or at the bank, or by using a debit card over the phone), and including the receipt in with your application, or you can send payment off with your application by cheque or postal order. You can even pay the application fee in instalments. There are details of how to do this in the debtors guide on the AiB website here and in the debtors’ application pack.  Note that you have to have payed the fee in full before you can send in your application. You cannot make payment by credit card.


If you cannot afford to pay the fee, it’s fine for someone else to do so, or you can make small payments over time and then send off all the receipts with your application.

Step 5: Waiting For A Decision

The decision to sequestrate you won’t take long. As long as you complete the forms correctly and provide all of the information required, you could receive confirmation of the sequestration in just 5 days. It really can be that fast!

Step 6: An Insolvency Practitioner Is Appointed

You can choose for an Insolvency Practitioner to be appointed as trustee and take care of the administration of your Sequestration by putting their details into your application.  If you do not nominate an Insolvency Practitioner the AiB will become your trustee and she may administer your bankruptcy herself or appoint an Insolvency Practitioner to act as her agent.


 An interview meeting with your IP will be arranged shortly after this to go through all of your details and start the next step of your sequestration – the valuation and sale of your assets if applicable. Your creditors will be told by your IP within 60 days of the date your sequestration was awarded, and you will never have to deal with your creditors again!

 

For more information on how to file for sequestration, call now and talk to one of our sequestration specialists experts on 0141 345 2904.

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Write Off Unaffordable Debts

In most circumstances an award of Bankruptcy will allow you to write off most of what you cannot afford to repay, i.e. liabilties such as unsecured loans and credit card debts will be dealt with by your Trustee. Note: There are some debts that cannot be written off. Click here* for more information on the limitations.
 

Free From Debt Pressures

Unlike a Trust Deed Scotland, Sequestration can make you totally free from provable debts, although you will have to make a contribution from your income for 3 years if you can afford to. Your Trustee takes over dealing with your creditors and you will be totally debt free subject to some limitations depending on your circumstances.
 

Government Legislation

A Sequestration is under the control of the Scottish Government and is intended to help people who are struggling wither finances. An award of Bankruptcy is not a debt management plan or IVA, meaning there are no regular monthly repayments to make, if you have no surplus income after meeting your normal monthly outgoings.

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