Sequestration.
Solution for Scotland
May not be suitable for all. No loans provided. Fees and disadvantages may apply depending on the solution, Read here
Honesty and Integrity
Support and Guidance
Ethical Practices
We make a difference
To find out more about managing your money and getting free advice, visit Money Helper
Authorised and regulated by the Financial Conduct Authority
Sequestration.
Solution for Scotland
May not be suitable for all. No loans provided. Fees and disadvantages may apply depending on the solution, Read here
Honesty and Integrity
We make a difference
How can Sequestration help me?
Sequestration is a formal debt solution in Scotland that can help you by legally freeing you from most debts and stopping creditor action.
It involves transferring your assets to a trustee who will manage them to repay creditors as much as possible.
After completing sequestration, any remaining unsecured debt may be written off, giving you a fresh financial start.
How does Sequestration work?
If you decide that sequestration is the right solution for your debts, you will need to pay the application fee and submit the application form to the Accountant in Bankruptcy (AiB). A debt adviser will guide you through the process and assess if sequestration is suitable for your situation, providing advice on how to proceed with the application.
Once your application is reviewed and approved by the AiB, sequestration will be granted, and you will be protected from creditor actions. Your appointed trustee will manage the process, collecting a monthly contribution from your income over a 4-year period and selling any assets to pay creditors. Your contribution is set at the start and reviewed every twelve months.
You will typically be discharged from sequestration after one year, provided you cooperate with your trustee, although any ongoing contributions will continue for up to four years if applicable.
"The team were supportive from the beginning. The advice was clear making it very easy to decide a solution path."
Linda
12 Jun 26
Verified company on Trustpilot
Sequestration FAQs.
Here are four frequently asked questions
What is sequestration and how does it work?
Sequestration is a formal debt solution in Scotland, where your assets are transferred to a trustee to manage, and your creditors are paid from any available funds. You make monthly payments based on your income, and after a set period, remaining debts are typically written off, offering a fresh start.
How long does sequestration last?
Sequestration generally lasts for one year, but if you can contribute a portion of your income, it may last up to four years. Your trustee will review your payments every twleve months.
Will sequestration stop creditor actions?
Yes, once sequestration is granted, you will be protected from further legal action by creditors, including wage arrestments or court orders for debt recovery.
Can I keep my assets during sequestration?
It depends on the value of your assets. If you have valuable assets, such as property or cars, your trustee may sell them to repay creditors. However, essential items, like household goods or tools needed for work, are usually protected.
Eligibility of Sequestration:.
Residency: You must be living in Scotland, as sequestration is a Scottish legal process.
Debt Amount: There is no minimum debt amount.
Inability to Pay: You must be unable to pay your debts as they become due and have no realistic way to repay them.
Unsecured Debt: Sequestration is typically for unsecured debts, such as credit cards, loans, and overdrafts. Secured debts (e.g., mortgages) are not included.
Income and Assets Assessment: Your ability to pay a contribution toward your debts will be assessed. If you have a regular income or assets, a contribution may be required for up to four years.
No Previous Sequestration in Last 5 Years: You cannot apply for sequestration if you have been discharged from sequestration in the past five years.
Here are some typical examples.
Individual Voluntary Arrangement Example
Example case completed in 2024
Repayment calculated using income and expenditure data. Monthly payments and write off percentages are based on individual circumstances.
IVA is typically for a period of 60 months, depending on your homeowner status
Nominees fees £1,900 & Supervisors fees £1,750 = total fees £3,650, this amount is deducted from the repayment amount over the 5 year period
Authorised and regulated by the Financial Conduct Authority
More than a Debt Company.
At Debt Advisory Services Scotland, we are your…
Any reference to Debt Advisory Services throughout the site change to Debt Advisory Services Scotland.
Sequestration Fees.
There is a fee of £150 to apply to enter Full Administration Sequestration process in Scotland. You might be able to pay this in instalments and if you are in receipt of certain prescribed social security benefits (e.g. Universal Credits, Child or Working Tax Credits) or you are assessed as having no surplus income then there is no application fee payable.
The fees and costs of any subsequently appointed Trustee fees and costs are met from any the funds received into the bankruptcy through the realisation of assets and any monthly income contribution; there are no payments due by you over and above the agreed contributions from your income and/or assets realised.
A Protected Trust Deed (PTD) can only be provided by an organisation with a licensed Insolvency Practitioner, such as Debt Advisory Services Scotland. The initial advice is free, and fees for a PTD are consistent across providers, as outlined below.
To set up a PTD, your Insolvency Practitioner (or trustee) will assess your income and expenses to determine an affordable monthly payment for your creditors, factoring in your essential bills and living costs. PTD fees and costs are deducted from these payments, and the remaining amount is distributed to creditors. This split and the trustee’s fees are reviewed and approved by your creditors as part of the process to achieve protected status.
The trustee’s fees generally include:
- A fixed fee, ranging from £1,000 to £2,500, depending on the complexity of the PTD.
- A realisation fee, usually 10-20% of the funds received.
The Accountant in Bankruptcy (AiB), a Scottish Government agency, supervises PTDs and can audit the trustee’s fees for a 5% charge if requested by you or your creditors, which would reduce funds available to creditors.
During the 4-year PTD term (or longer if needed), the trustee and their qualified staff will:
- Prepare and present your PTD proposal to creditors.
- Obtain protected status for the PTD.
- Handle creditor and AiB communications.
- Monitor your payments and any changes in your financial situation.
- Annually review your finances and update creditors on PTD progress.
- Distribute dividends to creditors and finalize the PTD at completion.
Example of PTD costs and outcomes:
- Monthly Payment: £206
- Total Debt: £21,460
- Term: 48 months
Advantages of Sequestration
Debt Forgiveness: It’s possible to have 100% of your unsecured debt written off through sequestration.
Creditor Relief: Your trustee will handle all communications with creditors, relieving you from the stress of constant phone calls and threatening letters.
Protection from Legal Action: Creditors can no longer take legal action against you to recover their debts.
Frozen Interest and Charges: Interest, fees, and charges are frozen, meaning creditors can only claim the balance owed at the time of sequestration.
Affordable Monthly Payments: You’ll make one manageable monthly payment, which covers living expenses and household bills.
Discharge After 1 Year: You are typically discharged from sequestration after one year, provided you comply with the process and the trustee does not delay it.
No Court Involvement: The application process with the Accountant in Bankruptcy (AiB) does not require court proceedings.
Relief from Diligence: Sequestration stops or removes existing diligence actions, such as wage arrestments or inhibitions.
Disadvantages of Sequestration
Regular Contributions: If you are assessed as having sufficient income, you must make contributions towards your debts for up to 4 years. If you fail to pay, your employer may be required to deduct payments directly from your wages. However, if your income is solely from benefits, you won't have to make contributions.
Impact on Credit Rating: Sequestration will affect your credit rating for 6 years, making it more difficult to obtain credit, such as a mortgage or loan, in the future.
Sale of Assets: You may be required to sell some of your possessions, including your home, to help repay your debts.
Job Restrictions: Bankruptcy may prevent you from holding certain jobs, standing for public office, or acting as a company director. You could also be dismissed from positions, particularly in financial services.
Limits on Borrowing: There will be restrictions on how much you can borrow during your bankruptcy.
Directorship: You may not act as a Director of a Limited Company whilst an undischarged bankrupt.
Cooperation with Trustee: You must cooperate with your trustee throughout the process. Failure to do so could delay your discharge, require you to undergo financial education, or result in further restrictions even after your bankruptcy ends (known as a bankruptcy restriction order).
Sequestration FAQs Continued.
How much do I need to owe to apply for sequestration?
There is no minimum debt level required.
Can I apply for sequestration if I’m self-employed?
Yes, self-employed individuals can apply for sequestration. The trustee will assess your income and expenses to determine what contribution, if any, you need to make towards repaying your debts.
Will sequestration affect my job?
While sequestration itself won’t necessarily affect your job, certain professions, especially those in financial services, may require you to disclose your bankruptcy status, which could result in dismissal or a job restriction.
Can I apply for a loan during sequestration?**
During the 12 months of your formal bankruptcy, you will be unable to borrow or obtain credit of more than £500
What happens after sequestration is complete?
Once your sequestration is complete, any remaining unsecured debts are typically written off, and you will be discharged from bankruptcy. This means you will no longer be legally liable for the debts included in the sequestration.
How Debt Advisory Services Can Help You.
Your Finances
We’ll take time to understand your situation and finances
Your Options
We’ll talk you through your options and help you make those important next steps once you are ready.
Your Journey
We’ll be with you from start to finish and we are committed to helping you get your life back.
Get Started.Tell us about your finances and we'll recommend a solution
Step 1 of 4
How much debt do you have ?
Find out if you qualifyPlease complete the form and find out how one of the most largest solution providers in the UK can help you:Find out if you qualifyPlease complete the form and find out how one of the most largest solution providers in the UK can help you:Freeze interest and chargesStop all creditor calls and lettersReduce your debt payments
Industry Standards
As a proud member of DEMSA, we are deeply committed to maintaining the highest industry standards.
This commitment ensures that our debt management services are conducted with the utmost ethical integrity, transparency, and professionalism.
We strive to build trust with both our clients and creditors, providing solutions that not only meet regulatory requirements but also foster confidence in our approach.
Our adherence to DEMSA’s rigorous standards reinforces our dedication to delivering reliable, trustworthy advice and support throughout your financial journey.
Industry Standards
As a proud member of DEMSA, we are deeply committed to maintaining the highest industry standards.
This commitment ensures that our debt management services are conducted with the utmost ethical integrity, transparency, and professionalism.
We strive to build trust with both our clients and creditors, providing solutions that not only meet regulatory requirements but also foster confidence in our approach.
Our adherence to DEMSA’s rigorous standards reinforces our dedication to delivering reliable, trustworthy advice and support throughout your financial journey.
Let us help
Get started and find a solution with the help of an advisor.