Sequestration:


The Main Features Include:

Sequestration is the Scottish legal term for bankruptcy where you are formally declared bankrupt by the court.

Sequestration involves the transfer of your assets and property into the hands of a Trustee for the benefit of your creditors.

The Trustee in Sequestration has a duty to sell the assets/ property for the benefit of your creditors.

The Trustee may seek a voluntary contribution if you are in regular employment.


Advantages Of Sequestration:

Your creditors will no longer be able to pursue you to recover outstanding debts.

It will lift any wage or bank arrestments currently in place (a trust deed will not).

You will be discharged after 3 years and will be debt free (unless you have accumulated new debts since the date of your sequestration).


Disadvantages Of Sequestration:

Any assets you have may have to be sold for the benefit of your creditors.

If you receive any money or property after the date of your sequestration but before the date of being discharged you will be required to surrender it to the Trustee.

While you are sequestrated it will be unlawful to incur credit above £250 without declaring to the new lender that you are an un-discharged bankrupt.

Your Sequestration will be noted by the Credit Referencing Agencies and you may have problems in obtaining credit even after your discharge.


Whilst Sequestration should usually be seen as a last resort when no other options are available it can be in some occasions be the best solution.

Situations When Sequestration Could Be Considered:

If a creditor has already petitioned for bankruptcy it could, in some circumstances be beneficial to petition for your own bankruptcy. This would allow more control over the process.

Where the debtor has no realizable assets and no available income and this situation is unlikely to change within the next 3 years.

As many cases of Bankruptcy can be avoided providing advice is sought and taken early we will always involve fully qualified, professional and sympathetic Insolvency Practitioners to provide up to-date information and advice to our clients.


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