Here are some of the questions we receive from people in debt who think sequestration could help them.
What Is Sequestration?
A debt solution for people in Scotland who are unable to repay their debt within an acceptable period of time. It will allow people to have their debt written off if they don’t have a disposable income.
How To Enter Sequestration?
There are three routes to entering sequestration, these are, certificate of sequestration, low income, low asset (LILA) or creditor petition. The first two can be applied by the person in debt and the later only creditors can apply for.
Who Can Enter Sequestration?
Only people living in Scotland can enter sequestration. Each route into it however will have their own criteria for who can enter. Certificate of Sequestration: Cannot have been declared bankrupt in previous 5 years. Must owe at least £1,500. Appropriate evidence of any debts, wages, bank statements etc. Live in Scotland. Low Income, Low Asset (LILA): Income must be less than £247.60 per week. Cannot own any property or land. Cannot own or run a limited company while entering or still in the LILA. Cannot be a Member of Parliament or council
Cost of Sequestration?
The cost will depend on which route is being taken to enter the sequestration. Certification of sequestration: £200, LILA: £200, creditor petition: paid by the creditors
Are All Debts Included?
No, while all unsecured debts will be included, secured debts will not be included. Any debt which is attached to a property or other asset will still need to be paid until the it’s no longer secured.
Does Sequestration Affect my Family or Friends?
Debt is personal so no one else can be directly affected by someone declaring themselves bankrupt. If someone has a joint mortgage or joint debts they could be indirectly affected. When there are joint debts and one party declares themselves bankrupt all responsibility to repay the debt goes to the other person named on it.
How Long Does Sequestration Last?
1 Year, however an official receiver could place an income payment order for up to 3 years.
Do I Have To Pay Anything To My Debts?
If someone applies for and is granted a LILA they won’t have to repay anything. Entering via a certificate of sequestration could mean the person in debt has to repay something each month.