Sequestration (Bankruptcy)

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What is a Sequestration?

Sequestration is the Scottish version of bankruptcy. During sequestration, you transfer all your assets to a trustee who manages the sale of your assets. It allows individuals to sell their estate, write off unaffordable debts and start again from scratch. It’s very similar to a Trust Deed and can actually produce better outcomes for people in certain situations. Once your sequestration is over, all your remaining debts are written off and your creditors should not hassle you any more.

Are You Eligible?

Trust deeds were designed to help people with serious debt problems and aren’t available to everyone. To qualify for a trust deed, you must:

  • Currently, live in Scotland or have a place of business in Scotland.
    Owe more than £3,000.
  • Have not been sequestered (bankrupted) in the last five years.
  • Be classed as insolvent. (You cannot pay your debts when they fall due.)

Sequestration Process “How it works”

If you decide to proceed with sequestration, we will guide you through the process from start to finish, explaining each step and your obligations along the way. We have included a brief overview of the process below so you know what to expect.


Complete the Sequestration Form

Your first step is to complete the sequestration form available from the Accountant in Bankruptcy (AiB). The form covers both Minimal Asset Process (MAP) sequestration (for people with low income and low assets) and the standard sequestration process. Your money adviser or IP can help you fill this in to ensure all the information is accurate.


Certificate of Bankruptcy

If you meet all the eligibility criteria of sequestration, your money adviser or IP will issue you a Certificate of Sequestration. The certificate is only valid for 30 days.


AiB Review

Your money adviser or IP will add your Certificate of Sequestration to your application form and send both to the AiB. The AiB then reviews your application and either approves or rejects it. The AiB usually responds within five days unless they require additional information.


AiB Approval

Once your application is approved, your assets pass to the control of your trustee. Your trustee then sells your assets and evenly distributes the funds to your creditors.



You can be discharged from sequestration after 12 months. However, your trustee may still continue to sell your assets past the 12-month threshold. Additionally, you will still have to cooperate with your trustee even after you are discharged.

Advantages & Disadvantages

Like all financial schemes, trust deeds are complicated and come with a range of advantages and disadvantages. In the sections below, we have summarised some of the key points to help you make a more informed decision.


  • At the end of the sequestration process, all your remaining debts are written off. After this point, your creditors cannot continue to hassle you.
  • As soon as your sequestration is approved, your creditors must stop pressuring you for payment.
  • As soon as you sign your trust deed, your creditors must freeze all interest, penalties and fees related to your debt. In other words, a trust deed stops your debt getting bigger.
  • Most people are discharged from sequestration after 12 months.
  • Sequestration is very similar to a trust deed. In particular circumstances, for example when living in rented accommodation, it can actually be a better option for people.


  • All personal insolvencies are entered onto the insolvency register which is publically available on the Internet.
  • Your sequestration will stay on your credit file for six years, which will make it difficult to obtain credit.
  • You are unable to act as a company director during sequestration.

Why choose us for debt advice?

Since we founded this company 5 years ago, we have dedicated our time to supporting local people through challenging financial times. Over the years, we have helped hundreds of people take control of their finances and get their lives back on track.

We are tremendously proud of our service and believe it’s reflected in our ICAS and FCA authorisation.

If you are unsure about which debt management scheme is right for you, we encourage you to call our team or visit our office for free, confidential and no-obligation advice. The most important thing for us is that you make an informed decision concerning your finances.


In our experience, people have a lot of questions when they are struggling with debts. In this section, we’ve tried to answer some of the most common questions related to sequestration (bankruptcy) and debt management in general. If we didn’t answer your question, please get in touch with out team today and we’ll do our best to help.

There are a number of eligibility criteria for sequestration. You must:

  • Currently live in Scotland;
  • Owe more than £3,000;
  • Have not been sequestered (bankrupted) in the last five years;
  • Be classed as insolvent; and
  • Have obtained a Certificate of Sequestration.

There is a £200 application fee (£90 for MAP sequestration) payable to the Accountant in Bankruptcy (AiB). All ongoing fees and costs charged by your trustee are taken from the realisation of your assets.

Typically, people are discharged 12 months after the date their sequestration is approved. You trustee will continue the process of selling your assets until all your assets have been realised (sold).

Yes, your sequestration will stay on your credit report for six years from the date it is awarded.

If you arrange your sequestration with us, your trustee will be one of our experiences insolvency practitioners: Barry Stewart or George Lafferty.

If you choose to take advice from us and proceed with bankruptcy, your trustee will be one of our in-house Insolvency Practitioners.

MAP sequestration is designed for people with low income or low assets and is an alternative to standard sequestration.

If you are self-employed or a sole trader, sequestration may affect your ability to continue to trade. Your trustee will assess your circumstances and let you know.

Your sequestration is entered onto the sequestration register which is publicly accessible via the Internet. However, no one will actively inform your friends and family unless they are also one of your creditors.

Generally speaking, no one will tell your employer and there is no reason for them to know. However, be careful as some professions require you to sign ‘fitness and propriety’ declarations, which ask you to disclose your sequestration.

People often worry that a trust deed will stop landlords from renting property to them. While it’s true a trust deed will show on your credit report, that is just one part of the tenant selection process. Many people with a trust deed continue to rent property.

You can include most unsecured debts in your sequestration, including credit cards, overdrafts, personal loans and so on. Secured debts, for example, mortgages, cannot be included.

Since your car is an asset, you may have to sell it. However, it really all depends on its value. Generally, your trustee will exclude cars under £3,000 that you require for work. All other vehicles will be sold.

Sequestration is the Scottish equivalent of bankruptcy. In terms of process and outcome, the two are virtually identical.

Sequestration proceedings can be initiated by one of three parties: you, your creditor or the trustee of a trust deed. Obviously, all three have differing motives and objectives.

You Certificate of Sequestration proves that you are insolvent and cannot pay your debts when they fall due.

The Accountant in Bankruptcy (AiB) is the governmental organisation that oversees all insolvency proceedings in Scotland, including sequestration, trust deeds and the debt arrangement scheme. The AiB must approve all sequestrations before they proceed and will act as the trustee in a sequestration if no other trustee is appointed.

Do you qualify for debt help?

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  • Complete our call back form and one of our friendly team will be in touch with you today
  • We will listen carefully about your financial circumstances and identify what you can afford to pay each month.
  • Our FCA accredited team provide you with independent debt advice allowing you to plan the best steps forward.

Check to see if you qualify to get debt help

  • Stop bankruptcy

  • Lower Monthly Repayments

  • Write off unsecured debts

Get Started