0161 667 2599


Debt Solutions»Bankruptcy


If you simply can't afford to repay your debts in full, bankruptcy could get you out of debt in as little as a year, as long as you agree to repay as much as you realistically can. You may have to make affordable payments towards your debt for up to four years.

Request a callback to find out whether bankruptcy could help you. Or if you'd prefer to talk to an expert over the phone, call us on 0161 667 2599.

What is bankruptcy?

Bankruptcy - also known as sequestration - is a legal procedure in which your unaffordable unsecured debts are written off normally after one year, on the condition that you repay as much as you can. This may involve the sale of valuable assets (e.g. your home and car) and monthly payments for up to four years, if you can afford it.

Once agreed, it protects you against further action from your lenders, which can be a big help if you've been receiving letters and calls demanding payment that you can't afford.

To apply for bankruptcy in Scotland, you must owe more than £1,500 and not been bankrupt in the last 5 years; you must have either a "Certificate for Sequestration" from an Insolvency Practitioner or Money Adviser, or one or more of your lenders either agrees to your application or has started legal action against you or your application for a trust deed has failed. Or you could still apply for bankruptcy through MAP if your debts are less than £17,000, you don't have many valuable possessions and have no spare money to make any payments towards your unsecured lenders once you’ve paid your essential bills.

Learn more about bankruptcy here

What is sequestration?

Sequestration is just the legal term for bankruptcy in Scotland. It's exactly the same thing.

How does bankruptcy work?

To apply for bankruptcy in Scotland, you must pay a £200 application fee (£90 for MAP) to the Accountant in Bankruptcy (AiB). You'll also have to fill in the relevant forms. We can take you through this process - call us on 0161 667 2599 and one of our experts can tell you how it works.

If your bankruptcy is agreed, rights to your valuable belongings ('assets') will be handed over to a 'Trustee' (the person who oversees your case). Your assets may be sold to help repay your lenders, depending on how much is owed. This may include your home if you're a homeowner, and your car if it is worth more than £3,000. It shouldn't include items in your home (e.g. clothes, gadgets and home appliances).

You will normally be officially 'discharged' after one year (6 months for MAP), at which point the unsecured debts you can't reasonably afford to repay will be written off. However, if you can afford it you may still be required to make regular monthly payments to your lenders for up to four years.

Find out more about how bankruptcy works

Who can qualify for bankruptcy?

In general, you are likely to qualify for bankruptcy if you can say 'yes' to the following:

  • You must owe at least £1,500 in unsecured debt (loans, credit cards etc) AND
  • You have not been bankruptcy in the last 5 years, AND
  • You have a "Certificate for Sequestration" from an authorised person (such as an Insolvency Practitioner or Money Adviser) confirming you cannot pay your debts as they become due, OR
  • You enter into a Trust Deed which is rejected by your lenders (i.e. it does not become protected),
  • You can afford the application fee to the Accountant in Bankruptcy (AiB)

You must still get approval from the Accountant in Bankruptcy, however, and they may reject your application if it appears that another solution is more appropriate.

You may be able to apply for bankruptcy through MAP if you owe less than £17,000, have no spare money to make any payments towards your unsecured lenders once you’ve paid your essential bills and don't have many valuable belongings. Find out more about MAP bankruptcy here.

Alternatives to bankruptcy in Scotland

Bankruptcy should only be considered as a last resort.

Especially as it may impact on your day-to-day life by restricting certain employment options (eg you can’t be the director of a company).

It may be that there are alternative debt solutions that are more appropriate for your circumstances - especially if you feel you can afford to repay some or all of what you owe.

Other debt solutions we provide include:

If you'd like to know more about which debt solutions could help you, request a callback for an instant assessment. Or if you'd like personalised advice from one of our experts, give us a call on 0161 667 2599.

Bankruptcy advice

Could we have a joint Trust Deed?

If you have joint debts that you can't afford, you could both enter into a Trust Deed. Although joint Trust Deeds don't exist, both your Trust Deeds will take your joint debts into account.

Read more