Sequestration Pros and Cons

Think of the highs, not the lows

So we’ve established the basics of Scotland’s sequestration. That it’s a last resort for many, especially those who greatly value their assets and even more so if there’s a sentimentality to them. Because frankly, creditors couldn’t care less. They, rightfully so in most cases, want what’s owed to them. And whether by choice or you’ve been forced into it – you’ve chosen the path of sequestration.

But it’s not all doom and gloom. There are a few advantages to enjoy, if you can call them that given your predicament. And you can count on Find a Debt Expert to give you all the advice, assistance an assurance you need along the way. We’ll have put our heads together and agreed on all the positives and some unfortunate but necessary negatives to any given sequestration. And remember, not all will apply to you – everyone’s circumstances are different.

Let's start with the positives

  • A Fresh Start – Onwards and upwards starts here. Now’s the time to put all unsecured debt problems behind you and start moving forward.
  • Goodbye debt – Your debt is gone once you’re discharged from Sequestration (Full Administration Bankruptcy); an income payment agreement will only last for a maximum of 4 years.
  • VAT? What’s that? – Got any VAT debts or HMRC tax arrears? Not anymore – these can all be included and written off in sequestration.
  • Relief from creditor demands. You no longer need to pay your creditors once sequestration starts. Your insolvency practice will go through an income & expenditure to see what you can afford to contribute for four years.
  • A better-off financial future – The prospect of improving your financial position is recognised whether you enter voluntarily or are forced into sequestration.
  • One year and you’re out of here – Sequestration will only last for 12 months. You will then be discharged and no longer bound by the restrictions of Sequestration.
  • It costs less than you might think – Sequestration is relatively inexpensive – you will need to pay a one-off fee of £200 to the Account in Bankruptcy (AIB) (link – https://www.aib.gov.uk). More affordable than you thought?
  • A huge helping hand – Your financial affairs are handed to a licensed Insolvency Practitioner – a big relief when big debts are being handled.
  • Tried and trusted – You’ll be appointed a Trustee who acts as a mediator between debtors or creditors, which can help provide reassurance for both.

Now for the negatives

  • Handing over assets – From now on, an Insolvency Practitioner will legally handle your assets. It can be upsetting, especially if the house has to be sold.
  • Negative credit rating – Inevitably, Sequestration will harm your credit rating. But after six years your credit rating returns to normal and insolvency is erased.
  • Sorry homelovers – You will not automatically lose your home if you’re Sequestrated. It all depends on the equity. If you own it outright, ouch.
  • Loss of employment – Some roles don’t allow you to have been declared bankrupt – Company Director, Solicitor, Accountant and various roles in the financial services community.
  • Like smaller cars? – We’re afraid you’re going to have to if it is over £4,000. Unless of course you need it as a day-to-day essential.
  • Payments. Payments. Payments. – You will have to make payments in the form of an income payment agreement for 4 years. You could even be paying beyond this time.

See it’s not all that bad, is it?

Yes, sequestration can be expensive. But you can do this. If got yourself into a rut, you’re going to have to climb out again.

Hey, at Solutions Scotland we’ve seen a lot of shoveling being done. Honestly, we don’t mind getting our hands dirty to keep yours clean. You’ve just to stick with a repayment plant that’s rignt for you. You and us – we can do it.

Solutions Scotland is a trading style of Milton & Stirling Ltd, Company Number SC587851 – Solutions Scotland, 78a Stanley Street, Glasgow, G41 1JH. DPA number ZA431921

Milton & Stirling Ltd are an Appointed Representative of MichaelAlan Ltd who are authorised & regulated by the Financial Conduct Authority, FRN 690939.

As part of our free service, we’ll review your financial situation, explain the available options and recommend a debt solution which is suitable for you. The risks of all suitable solutions will be explained clearly and if you decide to go ahead with a debt solution we will refer you to one of our trusted providers who specialise in the management of that debt solution. We’ll be paid for introducing you or for the preparatory work we do, depending on your debt solution fees may be payable if ongoing services are provided. Read about fees and key information in our terms & conditions. To find out more about managing your money and getting free debt advice, visit Money Advice Service , an independent service set up to help people manage their money.