Sequestration (Bankruptcy)

If you owe more than £1,500, and then can’t repay your debts when they are due, then a creditor (or you) can apply for your sequestration. This process is similar to the bankruptcy process in England and Wales.

Sequestration – things to consider

Sequestration is a serious process that can have a significant impact on your life, and that of your family.

Throughout the sequestration period, which can last one year but sometimes longer, control of all your assets is passed to a Trustee who is authorised to offer any of your assets for sale (with only a few basic exceptions) in order to raise funds to repay your creditors.

After you’re discharged from the sequestration process (usually after one year), then you don’t have to pay your unsecured creditors any more money. However the Trustee may request that you make a payment from your income for up to three years to go towards repayment of your debts.

Why is sequestration regarded as a ‘last resort’?

Having the Trustee take control of your own personal assets can be incredibly unsettling for you and your family. If you have equity in your home, for example, the Trustee is likely to sell it, leaving you with few options to find somewhere else to live.

Once you’re going through the sequestration process you’ll find it very difficult to obtain credit in future. And, as with bankruptcy in England and Wales, sequestration can cause you to be disqualified from holding certain positions of employment; such as Member of Parliament, Justice of the Peace, governor of a school, member of a Local Authority, or a company director.

After sequestration, you will find it very difficult to obtain any form of credit in future.

So while sequestration might be viewed as a ‘fresh start’ in that your debts are written off, you will find that it will have very severe financial ‘knock-on’ effects that can affect you and your family for many years.

Thinking about a sequestration?

Sequestration should be regarded as very much a last resort although this might still be a suitable debt strategy for you. Bear in mind that there may well be more suitable debt solutions available to you, depending on your circumstances.

Not right for you? Read about other debt solutions that may suit you better: Trust Deed, Debt Arrangement Scheme (DAS), Low Income, Low Assets (LILA), Buy-To-Let Mortgage, Bridging Loan, Remortgage, Debt Management Plan, Full & Final Settlement, Self-Managed Arrangement, Equity Release, Debt Consolidation Loan.