Today, 391 people will be declared bankrupt or insolvent. That’s one person every 51 seconds during the working day, according to Credit Action.
In this first article, we look at what sequestration is and we’ll follow that up with the things you need to know.
So, what is sequestration?
If you are sequestrated, all your debts can be written off within one year. It will remove the pressure you may be experiencing from your creditors (that’s the people you owe money to) by transferring your assets to a Trustee who has a duty to sell these and share the money made amongst your creditors.
What criteria do I need to meet?
You must live in Scotland or have lived there for the last 12 months
You can apply to the Accountant in Bankruptcy if you have debts of £1,500 or more
Your creditor(s) must have taken some action against you, for example, earnings arrestment, a Charge for Payment Order or a Statutory Demand
You must pay an administration fee of £100 to the Accountant in Bankruptcy
You can expect to be discharged from your sequestration after one year but it is important to know that both sequestration and bankruptcy are seen as last resort solutions. However, for some people it can sometimes be the only solution to help you get on the road to financial recovery.
The next part of this article will highlight the things you must take into consideration if you are thinking about sequestration including the impact on your credit rating and your assets.