Bankruptcy / Sequestration in Scotland

Bankruptcy, or "sequestration" as it is officially known in Scotland, is often seen as the last resort.  However, for many people bankruptcy can be the ideal solution.  Under bankruptcy you only pay back what you can afford, over three years.  The legislation relating to bankruptcy in Scotland has recently changed, allowing you to be discharged from your bankruptcy after one year.  Under the bankruptcy rules in Scotland you can now enter into bankruptcy with a "certificate of insolvency" these certificates are issued by authorised persons - normally Insolvency Practitioner and money advisors.

A common worry regarding bankruptcy is that you could lose your home or car. Under bankruptcy your trustee has a duty to look at your assets, including your home, and if there is equity in your home they will look for this to be made available to them.  In practice, we ask you to get a mortgage redemption statement then we arrange for a survey to be done on your property.  This will tell us home much equity is available for your creditors.  We will than discuss with you that best way to proceed.  Depending on your situation and if it can be shown to your trustee that you need a car, you may also be able to keep your vehicle.

• Pay back what you can afford per month
• Discharged normally after one year.
• It is possible to keep your home and car
• Stops earnings arrestments
• Creditors have to stop writing and phoning you.

You should never rush into any debt solution, especially bankruptcy.  This is a legal agreement and you cannot back out once you have been declared bankrupt.  The bankruptcy rules in Scotland are complex, so at Independent Debt Solutions we will ensure you are properly advised on how these rules will effect you.

Bankruptcy, like every debt solution, has disadvantages

• Bankruptcy will be recorded on your credit file for 6 years
• Whilst you are declared bankrupt you cannot be a company director
• If you own your home you may have to release any equity
• Your bankruptcy will be registered on the Insolvency register, which is publicly available.
• The Insolvency Practitioner who deals with your bankruptcy will charge approximately £4500 including the trustees outlays over three years, this comes off your agreed monthly contribution.

At Independent Debt Solutions we are here to answer any questions you have or deal with any problems that arise.  We aren’t a call centre.  When you contact us, you will always be able to speak to the same advisor.  Our clients are important to us, so we take the time to understand your situation and help you find the solution best for you.