Trust Deed Firms Issuing The Certificate for Sequestration in Scotland

Insolvency practitioners in Scotland, the professionals who take on Scottish trust deed cases, are becoming increasingly involved in the provision of a certificate for sequestration (bankruptcy services) for their clients. This development follows the introduction of the certificate for sequestration last year.

Insolvency practitioners have always been involved in sequestration. Many will have helped clients to enter bankruptcy when their trust deeds failed to become protected due to creditor objections. Many practitioners will also have had no option but to sequestrate their clients if the client fails to comply with the rules of their trust deeds, despite warnings to the contrary. A panel of insolvency practitioner firms also handle bankruptcy work that is distributed to them by the Accountant in Bankruptcy.

The certificate for sequestration in Scotland seems to have opened up new possibilities for trust deed firms to assist their clients. In the past many people had no access to sequestration. Without creditors having taken legal action against them, a failed trust deed, or conformity to low-income low-asset criteria, there simply was no route to sequestration.

Anecdotal evidence from our trust deed forum over recent years suggests this block led to some clients of trust deed firms signing up for trust deed payments that were unsustainable in an attempt to gain creditor support. This often stored up problems for later in the trust deed when the lack of affordability came back to haunt the debtor.

The certificate for sequestration in Scotland has subtly shifted this position. Unlike a protected trust deed, a trustee need not expect to repay a set minimum dividend to creditors in order to be able to take on a sequestration case. The client will need to contribute to the sequestration for a trustee to be able to collect their fees from the funds contributed, but the artificial dividend target has been removed which may encourage adherence to reasonable and realistic expenditure allowances by all parties.

A certificate for sequestration can also be issued by a trained and qualified money adviser. Many such advisers work within CAB (Citizens Advice Bureau) offices or Local Authority debt advice teams. Whether you use a trust deed firm (insolvency practitioner) or a money adviser you should not be charged for the issue of a certificate for sequestration. A £100 sequestration application fee will be required if you proceed, and you will be expected to contribute towards your debts from income and assets if you are in a position to do so.

As trust deed firms are private businesses which rely on levying fees to keep trading, they are unlikely to choose to assist with issuing a certificate for sequestration unless you are likely to be able to contribute towards your debts in a subsequent bankruptcy. Whatever your financial position however, a certificate for sequestration should be one of the options that you (and your advisers) consider if you are facing up to dealing with significant debt difficulties.

To learn more about the certificate for sequestration, what it means, what it does and how to get it, explore our website. Trust-Deed.co.uk is full of expert information, provided by experienced insolvency practitioner staff and qualified debt advisers. To find out more about the certificate for sequestration, or to find other ways to deal with your debts, browse the site or call one of our professionally qualified team members today on 0800 0437201.

Trust Deed Latest News