What Is Sequestration?


What Is Sequestration?

Sequestration is a formal insolvency process for those who have an amount of unmanageable debt which they cannot realistically repay. In Sequestration, most debt types are written off. Sequestration is a very serious option which can have very serious consequences to your financial future, so must be carefully considered before you decide to pursue it.


Sequestration is only available to residents of Scotland. You must owe more than £3,000 to your creditors and not have been made bankrupt within the last five years.

Advantages and Benefits

  • Once you have been sequestrated, included creditors are unable to pursue you or take any legal action against you to recover what they are owed.
  • Your Trustee (this may be an Insolvency Practitioner or the Accountant in Bankruptcy) will contact your creditors on your behalf so that you don’t have to deal with them yourself.
  • Provided you co-operate fully, the Accountant in Bankruptcy may grant your discharge at the end of one year.
  • If you are receiving welfare benefits, these will not be classed as income for the purpose of calculating your monthly contribution.
  • Your included debts will be written off once you have been discharged.

Disadvantages and Potential Consequences

  • Your sequestration will be displayed on an online Register of Insolvencies, which the public can search.
  • Your credit rating may be affected, and sequestration may affect your ability to obtain credit in the future.
  • If you are given money as a gift, you must inform your Trustee. Depending on the amount, you may be required to make this available for your creditors.
  • The fee for sequestration, paid to the Accountant in Bankruptcy, is £200.
  • If you are a homeowner or have assets, these could be sold to pay towards your debts.