The Certificate for Sequestration is the way to access sequestration ( go Bankrupt) in Scotland if non of your creditors have already taken legal action against you to enforce their debt.
The Certificate for Sequestration was introduced into Scottish law in November 2010. Before this date if you wanted to apply for bankruptcy you would have to be able to prove that legal debt recovery action had already been started against you, or that a trust deed had failed to become protected.
The certificate for sequestration process means that an authorised person such as a money advisor is able to issue a certificate for sequestration allowing you to apply to make yourself bankrupt without having to wait for one of your creditors to start legal debt recovery action.
How can you get a Certificate of Sequestration?
An authorised person must issue the certificate of sequestration. Authorised persons are defined as being Insolvency Practitioners, Money Advisers, CAB Money Advisers and Local Authority Money Advisers.
The adviser must satisfy themselves that you are unable to repay your debts as and when they become due. This will be ascertained via a fact finding exercise where your debts, income, expenses and assets are reviewed.
The adviser will provide a Debt Advice and Information Package and advise you regarding the consequences of bankruptcy. They will also provide information regarding the other debt solution options available such as a Trust Deed and Debt Arrangement Scheme. An adviser is not allowed to charge you for these services.
BMD Tip: The certificate can only be issued on the instruction of the debtor. It cannot be granted upon an application from a creditor.
Other Criteria you need to meet for a Certificate for Sequestration
As well as being insolvent defined as being unable to repay your debts as and when they become due, you must also meet various other criteria to take advantage of a certificate of sequestration:
• You must live in Scotland (or have lived in Scotland within the last year).
• You must not have been bankrupt within the previous five years.
• You must have at least £1500 of debts
• You must still pay a fee of £200 to the Accountant in Bankruptcy.
BMD Tip: The Certificate for Sequestration is widely regarded as a better alternative than LILA sequestration because it allows you to apply for sequestration where legal debt recovery action has not already started but is not restricted by the low income low asset criteria.
What happens after the Certificate For Sequestration is Issued?
After you have been issued with a certificate for sequestration you must apply for Sequestration (Bankruptcy) within 30 days during from the date that the certificate was signed.
If you do not make an application within 30 days your opportunity to apply will be withdrawn.
Despite having already provided information about your personal financial circumstances to the Money Advisor, evidence regarding your financial situation including payslips, bank statements, tenancy agreements and hire purchase agreements may have to be presented to the Accountant in Bankruptcy as part of the bankruptcy application.
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