SEQUESTRATION (BANKRUPTCY)
Sequestration, commonly known as bankruptcy in Scotland, is a legal process that can help individuals who cannot repay their debts to write off most of the debts, giving them a fresh start.
Benefits
- Interest and other charges stop accruing once sequestration is granted.
- Creditors and Debt collectors must cease their efforts to collect payments from you.
- Most of your unsecured debts are usually written off.
- You are generally protected from further court actions by creditors once sequestration is granted.
- Professional trustees manage the sequestration process on your behalf, handling the administrative aspects.
- Essential household goods are typically protected, allowing you to retain necessary items.
Risks
- You may need to sell assets, including potentially valuable property, to repay creditors.
- You might be required to make monthly payments for up to 4 years, depending on your financial situation.
- Sequestration is recorded on the public register of insolvencies for at least 5 years.
- This will remain on your credit file for 6 years from the date it starts.
- It could impact your job, especially if you work in a role that requires financial responsibility or if your employment contract includes insolvency clauses.
- You’ll face restrictions when borrowing money, both during and after the sequestration period.
- It may be more difficult to secure a rental agreement, as landlord often check credit history and insolvency records
