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Sequestration is only available in Scotland.

Sequestration is a form of insolvency and may be suitable if you can’t pay back your debts in a reasonable time. Assets you own, such as your house or car, could be sold to pay off your debts.

If your assets are worth more than your debts, or if all of your regular payments are up to date and you can afford to keep paying them, sequestration may not be the right solution for you.

Minimal asset process (MAP) bankruptcy is cheaper and can be more straightforward than sequestration and may be an option to consider.

While sequestration may be the best solution to deal with your debts it's important to understand the benefits and risks associated with it. 

Benefits of sequestration

  • You can be debt free in a short amount of time
  • All your unsecured debts are usually written off, though you may be required to make a contribution
  • You'll receive no further contact from your creditors
  • Your creditors can't chase you for the money you owe them
  • Most unsecured debts are included in sequestration

Risks of sequestration

  • If you have any assets, like a house or car, these may be sold to release funds for your sequestration
  • It may have implications for your job – for instance you will not be able to act as a company director
  • You may find it difficult to take out credit, as sequestration will be recorded on your credit file for six years

Seqestration is only available if you live in Scotland. Bankruptcy in England, Wales and Northern Ireland works differently and is administered separately. 

How do I apply for sequestration?

Making yourself bankrupt by applying for sequestration is a big step to take and requires expert debt advice.

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Find out whether sequestration is the right debt solution for you by using our online debt advice tool or speaking to one of our expert advisors.

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If this is the right solution, we can support you through the application up until it’s submitted to the Accountant in Bankruptcy.

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You'll need to pay a £200 fee to the Accountant in Bankruptcy (AiB) to apply. However, unlike some companies we won't charge any set up or advice fees.

Common sequestration questions

Sequestration is a big step to take, and you should seek expert debt advice to decide whether it's right for you. As an approved organisation we can give you advice on a range of debt solutions, including those only available in Scotland.

Before applying for sequestration you must make sure it’s the right solution for you, and seek expert debt advice. Use our free, confidential online debt advice tool to see if it's your best option.

You’ll also need to:

  • Owe more than £3,000
  • Be living in Scotland or have lived in Scotland sometime during the last year
  • Not have been made bankrupt in the last 5 years

You can apply if you’ve received one of the following:

  • A certificate for sequestration issued from an approved debt advisor
  • A charge for payment served on you and the 14 days allowed for payment have passed without you making a payment

The fee for sequestration is £200 which you pay to the Accountant in Bankruptcy (AiB). The AiB is the governing body responsible for administering the process of personal bankruptcy in Scotland.

There are no exemptions or reductions so the full amount needs to be paid. You can pay in instalments however, the full amount needs to be paid before your application can be made.

Sequestration normally lasts for a year. During this time you can’t borrow any more credit without declaring you're bankrupt, and you must let the Accountant in Bankruptcy (AiB) know if your situation changes. 

You may have to sell valuable assets such as a vehicle, but you can keep the things you need for day-to-day living.

Your details will also be added to a public register, called the Register of Insolvencies (ROI), for a period of five years.

This depends on who you work for and your role. It’ll state in your employment contract if sequestration will affect your job or you can ask your HR department. You'll no longer be able to act as a director of a limited company.

If you're a homeowner and there is equity in your home then your home could be sold.

If you're renting, you'll need to check your tenancy agreement before applying to become bankrupt. 

Yes. Some debts can't be included in sequestration, such as: Student loans, court fines and on-going child support payments.

Other things to consider with sequestration

Deciding to become bankrupt is a big commitment which is why you should seek expert debt advice. There are a number of issues to consider, including:

  • If you’re a home owner and have equity in the property you may have to sell your home
  • You may need to sell assets such as your car
  • Some employers, such as financial institutions, don’t allow people who are bankrupt to work for them
  • You won’t be able to be a director of a limited company or remain in some public office appointments
  • Credit reference agencies will record details of your bankruptcy and your credit rating will be affected for at least six years
  • It may be difficult or more expensive to obtain credit after your bankruptcy
  • Your name and address will be added to a public register called the Register of Insolvencies (RoI), for a period of five years
  • You may have to pay any surplus income you have, after your essential living costs are paid, into your bankruptcy for four years
  • You may have difficulties applying for tenancies with private landlords