There are three routes into sequestration (bankruptcy) in Scotland. These options include Minimal Asset Process, certificate of sequestration and creditor led sequestration. Before MAP and certificate of sequestration a person had to prove their apparent insolvency or wait for their creditors to sequestrate. These days anybody make apply for sequestration, which is why it’s vital to ensure it’s the right advice before applying. The MAP was introduced on the 1st April 2015 to replace the LILA route to Sequestration.
The MAP or certificate of sequestration debt solutions allow a person to enter a 1 year Scottish sequestration and resolve unsecured personal debts. The MAP could resolve debts within a 6 month period. The sequestration will usually last for one year, however payments could be required every month towards the sequestration for up to four years and assets may be sold for the benefit of creditors.
Minimal Asset Process (MAP)
The Minimal Asset Process route to bankruptcy in Scotland enabled a person to resolve their unsecured debts when they were unable to pay their creditors. The route costs £90 and is suitable for certain people, depending on their personal and financial circumstances. To be applicable for the MAP bankruptcy, you must
- Reside in Scotland
- Owe between £1,500 and £17,000 in unsecured debts.
- Have minimal assets which total no more than £2,000. No single asset can be worth over £1,000 except for a car, which can be worth up to £3,000.
- Not own a property, even if it’s in negative equity.
- Not have been made bankrupt in the last 5 years.
- Be on a low income or state benefits.
To determine if you would qualify for a Minimal Asset Process bankruptcy you should seek debt advice.
Certificate of Sequestration (COS)
The alternative route to resolving debt problems via sequestration is the certificate of sequestration. This also costs £200 to enter.
Some people choose the certificate of sequestration route because they want to enter bankruptcy but don’t qualify for LILA. The certificate of sequestration lasts for 1 year like any other bankruptcy.
The certificate of sequestration was introduced in 2010 to help people enter sequestration that couldn’t meet the LILA or trust deed criteria and were not applicable for any other debt solution.
If you are in employment then the certificate of sequestration could require a monthly income payment order to be set up where you are required to pay a monthly payment towards your sequestration. This payment plan would last for 3 years.
Bankrupt by Creditors
The final sequestration option is to let your creditors take you to court and apply for your sequestration. This means you don’t have to pay for your sequestration, instead your creditors will be making the payment.
You don’t have to appear in court and will receive a letter through once you have been made bankrupt. A bankruptcy specialist will be appointed to get back as much money from your Estate as is possible.
If you would like help with bankruptcy or to find out if you are suitable for sequestration in Scotland, call Debt Support Trust on 0800 085 0226.