Bankruptcy (Sequestration) in Scotland:
Bankruptcy in Scotland is called sequestration. It means you are no way able to pay any more debts and the court should let you out of this awkward situation by selling all your assets and satisfying your creditors.
When someone is declared Bankrupt?
By the creditors: If the creditors may make petition to the authorized court to declare you bankrupt if you debt amount is £750 or more. The court may grant the petition if he is satisfied.
Petition by Debtor himself: The debtor may if there are no more ways, make a petition to the bankruptcy court to declare him bankrupt. He would have to deposit an amount of £525 and another payment of £175, although the court may leave this amount. After the court declares you to be bankrupt your name and details will be published in ‘Individual Insolvency Register’ and an officer would be appointed to take care of the further proceedings. The period of bankruptcy lasts for 12 months.
What about the Assets?
Your assets will be sold to pay your debts. After the trustee takes over the matter he would call you for an interview and ask about your assets, bank accounts, credit cards etc. You can keep regular household items. Your account will be blocked but the trustee may allow a little money for food or your partner’s share.
What about Residence?
The trustee can sale your home if there is no other way. In case you are the sole owner of the home your title and beneficial interest will be transferred to trustee and he would add a bankruptcy notice at the entrance. If it’s a joint property then the court will decide the rest. But you can ask for time which may extend to 1 to settle your family.
What about Earning?
If your debts are still not over your trustee can ask you for a monthly payment from your spare income. It is called an ’Income Payments Arrangement’ (IPA) if you refuses the trustee can bring an order from the court, Income Payment Order (IPO).
You cannot borrow more than £500 hiding your bankruptcy.
Work as insolvency practitioner.
You can’t hold the post of director in a company.
Carry on a business with a new name.
You are restricted to create, manage or promote a company without prior permission of the court.