What is Sequestration?

This is the Scottish term used for Bankruptcy, and, although very similar to a Trust Deed, there are some differences.

Sequestration is a legal declaration that someone can’t repay their debts and is a way to obtain debt relief; so, if you’re struggling to make your financial commitments, this could be a good solution for you. However, you will lose control of any assets you have; meaning that if you own your home, it’ll be passed to your Trustee, who’ll seek to sell it and use any equity in it to provide some return to your creditors.

What does it involve?

It’s a form of insolvency; a way to help you become free of any debts that you can no longer afford to pay. Once sequestrated, your assets are realised (or liquidated) by a Trustee who deals with creditors on your behalf.

Find out if you qualify

What is the process of sequestration?

All applications for Sequestration are made to the Accountant in Bankruptcy (AIB). They have the final say on your application and will accept, or potentially reject it, if they believe another solution would be more suitable for you.

If your application is accepted, you’ll then be appointed a Trustee who’ll deal with your creditors for you. If you can afford to repay something towards your creditors then there could be monthly repayments; this is decided by the AIB. This is called a Debtors Contribution Order, or DCO.

Once sequestration is granted, creditors can’t pursue legal action against you and shouldn’t communicate with you via any method other than through your Trustee.

How long does it take?

Providing you comply with the (AIB), you’ll normally be discharged from the restrictions of Sequestration after a period of 1 year. However, if you can afford to repay something towards your debts, this can last for up to 4 years.

What do I need to be able to apply?


  • Debt Write-off, although you could be required to make an affordable contribution from your earnings.
  • Creditor protection.
  • Discharged from the restrictions of Sequestration after 1 year.



Can I keep a bank account?

You can keep a bank account. Your bank could freeze or close your account if you have outstanding credit with them. It may be a good idea to change to a bank that you don’t owe money to.

Will my employment be affected?

The majority of the time, your job won’t be affected. However, it’s recommended to check with your HR department first.

Can I keep my car?

If your car is worth less than £3,000 and there’s a legitimate need for the car. You’ll be able to keep it. If your car is worth over £3,000, this is an asset that will be transferred to the trustee. Your Trustee will discuss options with you.

Can I keep my home?

If there is equity in your home, there’s a possibility you’ll be made to sell it, in a worst case scenario. Your Trustee will discuss your options with you.