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    Do I Qualify?

    Use our debt calculator to work out the monthly payments you could be making to help clear your debt.

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    Bankruptcy, or sequestration as it’s more commonly known in Scotland, is one option for writing off the debt you can’t afford to repay.

    The same rules apply whether someone makes you bankrupt (a creditor’s petition) or you make yourself bankrupt (Debtor Application). A trustee is appointed to deal with your assets and liabilities, just as with a trust deed.

    If you have the ability, you may have to make a contribution from your earnings. You will usually receive your automatic discharge after 1 year. However, you may be required to make a contribution from earnings for a period of 4 years.


    Bankruptcy usually lasts for a fixed period of one year.

    You gain protection from any further debt recovery action, such as wages arrestment.

    The trustee deals with your creditors on your behalf.

    No court appearances.

    No fees to pay, other than £200 application fee (Debtors Application).


    Any assets you own may require to be realised. This may mean that your asset is sold. Alternatively, a third party (usually a friend or relative) pays the value of the asset to the Trustee on your behalf.

    Your credit rating will be affected for around 6 years.

    Sequestration may prevent you from doing some jobs.

    Certain types of debt cannot be discharged by sequestration. For example, student loans or any liability due to fraud.

    Your bank may close your account once you have been declared bankrupt.

    FAQs About Bankruptcy

    You will normally be discharged 12 months after the date you were made bankrupt, provided you co-operate with your trustee. If you are making a contribution, you must continue to pay this for 48 months. Your trustee will remain in office until all contributions have been received and any assets have been realised.

    Our advisors are real debt experts, qualified to give you the best possible, personally tailored advice. We will work with you to ensure you choose the right option and know what to expect prior to entering bankruptcy.

    All advice from Don’t Fret About Debt is completely free. Even if you decide not to proceed, there is no charge. You can also contact StepChange Debt Charity or Money Advice Service for free advice.

    Bankruptcy / sequestration are formal debt solutions for individuals who have unmanageable debts. They are a form of insolvency which write off any debts you are unable to pay back. There is certain criteria you must meet to be eligible for bankruptcy:

    • You must owe more than £3,000 in unsecured debts.
    • You can’t make yourself bankrupt if you have already been bankrupt in the last five years (however a creditor can).
    • Finally, you must be a Scottish resident or have lived in Scotland during the last 12 months.

    As an approved money advisor, we can give you debt advice and assist with completing the application. Our service is completely free.

    You must also have either:

    • A Certificate for Sequestration signed by the approved money advisor who has given you the advice. DFAD can provide this free of charge.
    • A charge for payment which has expired without making payment.
    • A summary warrant which has expired without making payment.

    If you are made bankrupt, it will stay on your credit report for six years from the date your bankruptcy is awarded. Usually, by the time someone considers bankruptcy, their credit rating is already affected by missed payments.

    It is unlikely that you will be offered credit while you are an undischarged bankrupt. However, once you receive your discharge after 12 months, your credit will start to repair itself.

    Not necessarily, especially if you own your own home and there is limited or no equity in the property. This means that there will be no surplus funds for your creditors after your mortgage has been paid off. Therefore it wouldn’t be beneficial to sell.

    If you have equity in your property, we would explore the option of a third party buying out your creditor’s interest in the property. This would avoid the need to sell your property. All details and options would be discussed and confirmed prior to entering bankruptcy. If there is no third party available, then we would suggest another option which protects your property.

    We are aware of banks which have this policy. Therefore, we will advise you to open a new bank account prior to entering bankruptcy. The new current account has to be a basic account with no overdraft facility.

    If you choose to take advice from us and proceed with bankruptcy, your trustee will be one of our in-house Insolvency Practitioners. They are all regulated by the Institute of Chartered Accountants of Scotland. With the Citizens Advice Bureau or the Money Advice Service you can appoint a trustee. If you do not, the Accountant in Bankruptcy will automatically be appointed.

    You can enter your total debt level into our debt calculator and a list of your available options will be emailed to you. This will include the minimum monthly repayments for each option. However, your actual monthly payments/contribution will be calculated based on affordability using the Common Financial Tool (CFT).

    You will need to take advice from an approved money advisor and declare you have received this advice on your application form. You will also need a Certificate for Sequestration. This is, unless you have an expired Charge for Payment of Summary Warrant. Don’t Fret About Debt can provide both of these free of charge if you nominate us to act as your trustee.

    There are certain restrictions that will be placed on you while you are an undischarged bankrupt:

    • You will normally be discharged after one year. However if you do not co-operate with your trustee, this may be extended.
    • Assets that you own will vest in your trustee, for example, homes with equity.
    • While you are an undischarged bankrupt, you will not be able to take out credit.
    • Trustees will have an interest in any windfalls you receive for four years following bankruptcy. This is despite you usually becoming discharged after one year.
    • Your name and address will appear in the Register of Insolvencies.
    • Your credit rating will be affected for up to six years.

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