Sequestration is a type of bankruptcy which is designed to provide a financial solution to people who have found themselves unable to pay off unsecured debts and which amount to more than £1,500.
The word sequestration is actually used in Scotland to mean much the same as insolvency in the rest of the United Kingdom, and it’s not an option to consider without getting a bit of appropriate Sequestration advice from Carrington Dean.
Image source: aib.gov.uk – Statistics released by Accountantin Bankruptcy– Scotland’sinsolvency service regarding personal insolvency rate 2017-18
In order to understand the procedure and concept, read below how it affects your assets, and how does it work.
How Does Sequestration Work?
If you’re in the particular position of having considerable amounts of unsecured debts and you feel there is no practical solution for paying all those debts off then signing up sequestration will be a reasonable way for you.
It actually was the case until a change in the laws and regulations in 2008 that a person in Scotland couldn’t decide to enter sequestration but could only be applied for that according to a petition by lenders.
This particular situation usually left borrowers helpless to fix their financial issues in any definitive way, with lenders able to continue adding interest fees and various other charges to outstanding unsecured debts.
Being Released from Sequestration
Be more responsive to full cooperation and compliance; a person is released from sequestration twelve months after entering it. On the other hand, the terms and conditions of particular sequestration, negotiation may usually include having to pay off pre-agreed payments to your creditors over the following period of around three years.
Specifically, how much and for how long an individual entering sequestration would have to pay the creditor back may depend on the evaluations of the trustee hired to supervise the process. The important concern in this particular context is your capability or otherwise as a person to pay off the debts you still owe.
What Is the Role of a Trustee?
When a trustee is hired for your issues in the particular context of a sequestration process, you’ll start to see that your financial situation is addressed in greater detail with an opinion to find a way forward which works for you and accommodates your creditors.
The Trustee proficiently takes control of your financial situation at this stage and finds the proper way to exactly what extent there’s a chance you’re able to pay back an amount of the unsecured debts you owe to your creditors.
Effects of Sequestration on Your Assets
It is likely any asset you have for entering sequestration would be considered in the particular assessment process that follows. The employed trustee, having taken control of all the assets, may look to find out where money could be raised in order to satisfy creditors and may make your mind up that selling the assets signifies an advantageous way of negotiating some of your debts.
On the other hand, it is definitely not unavoidable that entering sequestration would mean losing possession of your assets. The final decision as to whether or not your assets will have to be sold will be made by the Trustee, but they have a liability to be honest to both delinquent individual and his or her creditors.