Bankruptcy

Bankruptcy is often known as sequestration in Scotland. Bankruptcy arises in some circumstances because the debtor seeks to enter into sequestration. In other circumstances bankruptcy can arise because a creditor wishes to bankrupt the debtor.

If you are facing threats of bankruptcy from your creditors we urge you to contact a Protected Trust Deed firm, a Money Advisor, a debt advisor, a Citizen’s Advice Bureau or a debt charity as soon as possible. There is no need to pay for this advice and there is no need to join a long waiting list. If you’re being asked for money up front or being asked to wait for a long time move on to another source of advice. By quickly taking advice you may be able to resolve the situation for yourself or create a different outcome that is less severe than bankruptcy.

If you have low income and few assets you should also read about LILA Sequestration.

If you have decided to seek your own bankruptcy you must meet the following conditions:

• You must have debts of £1500 or more
  
• You must live in Scotland (or have lived in Scotland in the past twelve months)
  
• You must not have been made bankrupt in the last five years
  

You must also meet one of the following conditions:

1. One of your creditors is willing to agree to your bankruptcy and has completed a special form
   
2. A “Charge for Payment” has been made against you and expired without payment
   
3. An expired “Statutory Demand” against you exists

It costs £100 to apply for your bankruptcy

Once bankrupt a Trustee will be appointed. It is their job to try to recover money for your creditors. This might occur through the sale of your assets. It also might occur from payments being made each month to the Trustee based on an assessment of your income and expenditure.

Once bankrupt you must co-operate with your Trustee and keep them informed about any changes in your circumstances.

You will normally be discharged from your bankruptcy after one year. If you are paying a monthly contribution this will continue after discharge from bankruptcy (it normally runs for a total of three years).

Protected Trust Deeds , Debt Management Plans and The Debt Arrangement Scheme are all possible alternatives to bankruptcy or sequestration.

Trust Deed Firms