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Declaring Bankruptcy in Scotland (Sequestration)

Often people think of the word 'bankruptcy' as frightening, daunting, too serious to contemplate. However, for those that need it, bankruptcy can also be incredibly freeing - a way to get you back on track. Find out more below.

Do I Qualify?

How could bankruptcy help you?

Bankruptcy, or sequestration in Scotland, is a debt solution that allows you to take back control of your finances.

Often, people associate the word ‘bankruptcy’ with negative implications only; however, bankruptcy can also be incredibly freeing to people who have become overwhelmed with debt and need to get back on track.

If it is unlikely you will be able to repay your debts in full and if it’s also unlikely creditors will agree to a trust deed, bankruptcy may be an option for you. In a bankruptcy, you will only pay what you can afford towards your debt over a fixed period of usually four years. We will contact your creditors to inform them you have been made bankrupt, and give you legal protection from any action they may wish to take to recover the debt.

Whilst you will be required to pay what you can afford for four years, if you have co-operated with your Trustee, you may be discharged after one year. This means that the restrictions of bankruptcy would no longer apply. Of course, the agreed payments would need to continue throughout the four-year period.

When you contact Cleanslate for help with bankruptcy, our advisers will ask you some simple questions to fully understand your financial circumstances. Applying for bankruptcy is a serious step to take. If bankruptcy is not right for you, we will advise you of other options that might be more suitable.

How to go bankrupt in Scotland

There are two ways to be declared bankrupt in Scotland.

  1. Applying for bankruptcy.
  2. Your creditors make you bankrupt.

Declaring yourself Bankrupt

If you want to get help before creditors act, you could declare yourself bankrupt. It is often the most effective way to deal with problem debt.

To declare yourself bankrupt in Scotland you must:

  • Have not been sequestrated (declared bankrupt) in the last five years.
  • Have lived in Scotland within the last 12 months
  • Not be in a protected trust deed.

In addition to the above, you will need to provide evidence that you are unable to pay back your debt. At Cleanslate, we can do this by providing a Certificate for Sequestration, a formal document which verifies that you are unable to pay your debts as they fall due.

How creditors can make you bankrupt

In the event you have been unable to pay your debts to a creditor, they may begin a legal process to make you bankrupt. Creditors cannot make you bankrupt on their own, and the debt owed must be at least £3,000. The process creditors usually follow to make a debtor bankrupt in Scotland is as follows.

1. Decree from the Sheriff Court

Before anything else, the creditor must apply to the Sheriff Court providing evidence that you owe them money and that you have not paid them. If successful, the court will grant a Decree - legal confirmation that a debt exists between you and your creditor, and that it must be paid.

2. Charge for Payment

Once a Decree has been granted, your creditor can instruct a Sheriff Officer to serve you with a Charge for Payment. A Charge for Payment is a legal document stating that your debt must be paid in full within 14 days otherwise your creditor can enforce payment.

In some instances, you may be able to apply for time to pay.

3. Apparent Insolvency

Once the time limit on your Charge for Payment runs out, it will be considered an Expired Charge for Payment. Once expired, this constitutes Apparent Insolvency meaning the creditor is then able to takes steps to enforce the debt.

4. Bankruptcy Petition

The creditor can then petition the court to make you bankrupt and nominate either an Insolvency Practitioner or the Accountant in Bankruptcy to act as Trustee.

The Cleanslate Process

At Cleanslate, we’ve been helping people with their debt problems for over 20 years, with more than 20,000 people helped so far. Our tried and trusted process ensures every single client gets the best advice possible, specific to their own circumstances.

Step 1: Initial Consultation

When you first call our advice team, we will perform an initial consultation, this can be done over the phone or at any of our offices in Glasgow, Edinburgh or Aberdeen. This is a free, no obligation conversation to understand more about you, your debt, and your ability to repay it.

Step 2: Data Gathering

When you’re comfortable to proceed, we’ll take a deeper dive into your circumstances. Our goal here is to understand how much debt you have, what income and assets you have available to you and, most importantly, what you can afford (if anything) to pay back to your creditors.

Step 3: Find a Solution

Based on all the information available, your money adviser will discuss the debt solutions that may be appropriate to your circumstances. This might be a Debt Arrangement Scheme (DAS), Protected Trust Deed or Sequestration (Bankruptcy).

Step 4: Paperwork

Once you’re happy to move forward with the chosen debt solution, in this case, Bankruptcy, your money adviser with prepare the paperwork for you. Your adviser will then provide a formal certificate (Certificate for Sequestration) verifying that you are unable to pay your debts as they fall due. Once the application fee has been paid, your adviser will submit your bankruptcy application to the Accountant in Bankruptcy.

Step 5: Enjoy peace of mind

The paperwork is done. Your application will now be reviewed by the Accountant in Bankruptcy. Once accepted and entered onto the Register of Insolvencies, your bankruptcy will begin.

Frequently asked questions

Meet our team

Our people have successfully helped thousands out of debt. Meet some of the team that can help you turn your finances around.

Callum McGeady

Callum McGeady


Natalie Cummiskey

Natalie Cummiskey

Assistant Manager

Hazel Cann

Hazel Cann


Grant Morrison

Grant Morrison

Assistant Manager

Gillian Ayton

Gillian Ayton


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