Sequestration — bankruptcy in Scotland

The basicsWhat is sequestration?

Sequestration is the Scottish word for bankruptcy — the same formal procedure. It is run by the Accountant in Bankruptcy (AiB), and once you are discharged you stop being responsible for most of the debts it covers. It applies in Scotland only. In England, Wales and Northern Ireland the equivalents are bankruptcy, a Debt Relief Order or an IVA.

There are two routes: the Minimal Asset Process (MAP) for people with almost nothing to their name, and Full Administration for everyone else. You cannot apply on your own — the application must be submitted by an approved money adviser or a licensed insolvency practitioner. With complete paperwork, AiB normally decides within eight working days.

BenefitsWhy people consider it

Sequestration is normally looked at when nothing else fits. Both sides of it:

EligibilityWho qualifies?

Two conditions apply on either route: a Scottish home or place of business, and a Common Financial Tool assessment carried out by the adviser who applies on your behalf.

• MAP — what you owe: no more than £25,000. There is no minimum — the old £1,500 floor went on 6 February 2023 — and student loans are left out.
• MAP — what you own: assets under £2,000 in total, no single item above £1,000, a vehicle disregarded up to £3,000.
• MAP — income and property: no disposable income, and no land or property. Owning a home rules MAP out.
• Full Administration: at least £3,000 of debt, no upper limit — the route when you have assets, property or surplus income.
• Creditor petition: creditors owed £5,000 or more can petition the sheriff court if you are "apparently insolvent".

CostsWhat it costs

There is no application fee for MAP: it was removed on 6 February 2023 and AiB now lists the fee as "none". A debtor's own application for Full Administration costs £150, down from £200 on the same date, and is waived if you receive certain prescribed benefits or the assessment shows no surplus income. AiB reported 93.9% of applicants paid no fee in Q1 2026-27, but most of those are MAP cases, where there is no fee at all.

Contributions are separate. In Full Administration a Debtor Contribution Order takes the whole of your surplus income for 48 months from the first payment, starting no earlier than 14 days after you are notified. Discharge does not end the contribution order — you can still be paying it for around three years after the bankruptcy itself is over. With no surplus, or income only from benefits, it is £0; in MAP it is always £0. The trustee's fees come out of the estate and your contributions, not up front; and a MAP case moved to Full Administration — undisclosed assets, say — can bring further costs.

Open Finance is a commercial firm and charges for its services; our fee and what it covers are set out in writing before you commit to anything.

ImpactYour home, your record and your money

Your home. In Full Administration your interest in the family home forms part of the estate. If the trustee takes none of the steps set out in the Bankruptcy (Scotland) Act 2016 within three years of the date of sequestration, that interest is reinvested in you — unless the sheriff extends that period on the trustee's application. Tell the trustee about any property interest within three months: later, and the three-year clock only starts when the trustee finds out.

Your record and your money. The Register of Insolvencies entry is public, and your credit file keeps the bankruptcy for at least six years — which can affect borrowing and even employment long after discharge. Assets pass to the trustee and can be sold to pay creditors, though a MAP case has little or nothing to sell. In MAP the restrictions run for a further six months after discharge, and breaching them — failing to declare your status when borrowing, say — is a criminal offence punishable by a fine or imprisonment.

Next stepsWhere to start

Nobody can shortcut the process or promise you an award: the decision rests with AiB. It is worth knowing what else Scotland offers first — the Debt Arrangement Scheme (DAS), a statutory repayment programme that freezes interest and charges; a Protected Trust Deed, normally four years and needing at least £5,000 of debt, binding all creditors once protected; and a six-month moratorium, which holds off enforcement but neither writes off debt nor stops interest.

Tell us about your situation and we will explain how each Scottish route works, what it costs and what it does to your credit file and your assets, then point you to an approved money adviser who can apply. No obligation, no pressure.