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Sequestration

Before we would recommend sequestration we will analyse your client’s financial affairs and discuss any possible alternative courses of action with them to resolve their financial problems.

The key advantages of sequestration are:

• Creditors will no longer be able to pursue your client or take action against them to recover what they owe.
• They will not have to make further payments to their creditors.
• They may expect to be discharged after three years.

There are, however, some disadvantages:

• If they own any valuable assets, including endowment policies, these will usually have to be sold.
• If your client is in paid employment they may have to make a regular contribution for more than one year.
• If they acquire any money (wages and pension proceeds excluded) or property after the date of their sequestration and before the date of their discharge, they may have to surrender these to their Trustee.
• It is unlawful to incur credit of more than £500 whilst sequestrated unless your clients tell the lender that they are an undischarged bankrupt.
• Your client is not allowed to start up or be involved in the day-to-day management of a limited company.
• Your client is not allowed to act as a Member of Parliament, and there are certain other restrictions, such as acting as a member of any local council or school boards, etc.
• Their sequestration will be advertised in the Edinburgh Gazette and may be noted by credit referencing agencies. They may have difficulties in obtaining credit after their discharge.