Sequestration, the equivalent to bankruptcy in Scotland, is usually seen as a last resort for dealing with debt problems.

The main reason for this is that none of your assets are protected once you have filed for sequestration – your home and car (and any other significant assets) may need to be sold to repay your creditors.

While sequestration can be a good debt solution, we will always talk to you about the other solutions to ensure you are fully aware of your options.

When you contact PayPlan, we will look at your financial situation and go through every possible option to recommend which debt solution would be the best one for you.

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What is sequestration?

Sequestration is a debt solution that is available to anyone living in Scotland that has a minimum debt level of £3,000.

If your debts are greater than your assets, and you are struggling to make repayments to your creditors, sequestration could be an option for you.

If you have no income – for example, if you have been made redundant – and your debts are spiralling out of control, you could file for sequestration. All your significant assets would be sold to repay your debts – but after a year, as long as you still don’t have any income, your outstanding debts would be written off.

If you have an income, you could be required to make income contributions towards repaying your debts for four years.

If you are discharged from sequestration after a year because you have no income, and then you subsequently get a job – or receive a windfall – you will be expected to contribute towards repaying your debts. In sequestration, your income & expenditure will be reviewed annually so you only contribute what you can afford.

Is sequestration the right solution for me?

Sequestration is a debt solution that’s available for anyone who resides in Scotland.

If you cannot repay your creditors, but you can afford the £200 fee to file for sequestration, this could be an option for you.

When you get in contact with us, we’ll talk you through all of your options and make you aware of the advantages and risks of each debt solution.

Sequestration is advantageous because it allows you to become debt free quicker than a lot of other debt solutions but if you have assets that you don’t want to sell, like your home, it might be worth considering another option. When you contact PayPlan we will discuss all of your options to make sure you find a solution that is manageable for you.

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Alternatives to sequestration 

  • Trust Deed: A Trust Deed can protect your assets, and also involves a large amount of debt write-off.
  • Debt Arrangement Scheme (DAS): This allows you to pay back all your debts – but while you’re doing so, your unsecured creditors can’t add any further interest & charges, and they are also prevented from taking any further legal action against you.
  • Minimal Asset Process (MAP): This is a route into sequestration for people with no income. It only lasts 6 months. 

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