Sequestration and the Minimal Asset Process in Scotland

Sequestration is the Scottish name for bankruptcy, and the two terms mean exactly the same thing¹. It is a legally binding solution that writes off unsecured debts you cannot afford to repay, and it is only available if you live in Scotland². Once bankruptcy is awarded, your creditors must stop asking you for payments, cannot add further interest and charges, and cannot take court action against you⁴.

Scotland has two routes into bankruptcy: full administration, usually just called sequestration, and the Minimal Asset Process, known as MAP, which is a lower cost route for people on low incomes with few belongings of value⁵. MAP has no application fee, while full sequestration costs £150, which can be reduced to £0 if you receive certain benefits⁶. Both are managed by the Accountant in Bankruptcy (AiB), the Scottish government agency that oversees personal insolvency⁷.

Bankruptcy is a serious step. It stays on your credit file for six years⁸, it can mean losing your home if you own one, and it brings restrictions on borrowing and on certain public roles. But for someone whose debts have grown beyond what they can ever repay, it is a legal, established way to make a fresh start, and free advice is available before, during and after the process.

What sequestration writes off, and who deals with it

Sequestration writes off unsecured debts: money you owe that is not secured against an asset. Debts that can be included are things like credit cards, personal loans and overdrafts, arrears on priority household bills such as council tax, rent and utilities, benefit overpayments, and debts to friends or family members². Because these debts are written off only if you cannot afford to repay them, bankruptcy sits at the end of the range of debt solutions, and a money adviser will normally check whether something less severe, such as a debt management plan, a protected trust deed or the Debt Arrangement Scheme, fits your situation first.

The process is run by a trustee. In MAP bankruptcy the Accountant in Bankruptcy acts as trustee⁴; in full sequestration the trustee may be the AiB or a private insolvency practitioner, and their job is to administer your estate, gather in any assets and share out what is available among your creditors. The legal framework is the Bankruptcy (Scotland) Act 2016, which came into force on 30 November 2016 and applies to sequestrations begun on or after that date; cases begun before then still follow the older Bankruptcy (Scotland) Act 1985¹.

Once bankruptcy is awarded, protection from creditors is immediate. The Financial Conduct Authority's rules state that a firm "should not take steps to enforce a debt if it is aware that the [customer] is subject to a bankruptcy order (or sequestration in Scotland)"¹¹. That means no court action, no arrestment of your wages and no further chasing while the bankruptcy runs, though the debts that bankruptcy cannot write off, covered below, still have to be dealt with separately.

MAP or full administration: two routes into bankruptcy

Scotland has two similar bankruptcy routes, and which one you use depends on the size of your debts, your income and what you own⁵. Full administration bankruptcy, sequestration, is the standard route: it has no upper limit on the debts it can cover, it can include homeowners, and it allows the trustee to sell valuable assets and collect monthly contributions from your income. MAP bankruptcy is the stripped down route: it is faster, free of an application fee, and designed for people with low incomes and next to nothing in the way of assets⁴.

The practical differences are large. MAP normally ends after six months, provided you continue to meet the MAP criteria, and there is no monthly payment⁶. Full sequestration normally discharges you after one year, but the wider process can last four years or longer, and you may be asked to make monthly payments to the trustee for up to four years¹⁰. MAP cannot be used by homeowners, while full sequestration can involve the sale of a home⁴.

Both routes are entered the same way, through an approved money adviser, and both are recorded publicly: your name goes on the Register of Insolvencies, for at least two years in MAP cases and five years in full sequestration⁴. In the second quarter of 2026, 849 bankruptcies were recorded in Scotland, of which 482 went into bankruptcy via the minimal asset process route¹³, so MAP is the more common of the two.

Who can apply for the Minimal Asset Process

MAP bankruptcy is for people with a low income and not many items of value¹⁴, and it is only available in Scotland¹⁵. To apply, you must live in Scotland or have lived there in the last 12 months¹⁶. The eligibility tests are set by the Accountant in Bankruptcy⁹:

• You owe less than £25,000 in total. There is no minimum debt balance for MAP⁴.
• You own things worth less than £2,000 in total, with no single item worth more than £1,000⁹.
• You have no disposable income, meaning your earnings cover essential living costs with nothing left over. A low income can also be defined by your income being made up of income related benefits such as Universal Credit⁴.
• You must not have £1,000 or more in savings across all your bank accounts⁴.
• Your car is worth £3,000 or less⁴.
• You are not a homeowner. Homeowners cannot go ahead with MAP bankruptcy⁴.

If you received a lump sum or an asset above a certain value, it could be claimed for up to four years after the bankruptcy is approved, so MAP is not a way to shield money that arrives later⁴. One further restriction is on repeat use: the Scottish Government has considered the time period someone must wait before reapplying for a Minimal Asset Process bankruptcy, which stands at 10 years¹⁷, and the legislation behind debtor applications sets a 10 year rule for sequestrations made on a debtor's own application¹⁸.

Who can apply for full sequestration

Full sequestration has no upper debt limit, so it is the route for people who owe more than £25,000 or who own a home. The main tests are³:

• You live in Scotland, or have lived in Scotland during the last year³.
• You owe more than £3,000³. You can also make yourself bankrupt if you owe £3,000 or more under the ordinary rules, or if you qualify under the MAP rules²⁰.
• You have not been made bankrupt in the last five years³. The legislation puts this as a requirement that no award of sequestration has been made against you in the five years before your application²¹, and for debtor applications there is a separate 10 year rule covering previous awards made on your own application¹⁸.
• You are apparently insolvent, which usually means a creditor has taken formal action, such as serving a charge for payment that you have not paid, or you have a certificate of sequestration from an approved money adviser¹⁹.

Sequestration is not available to companies registered under the Companies Act 2006 or limited liability partnerships: the Act states it is not competent to sequestrate the estate of those entities²¹. The AiB may determine a debtor application if, at the relevant time, you had an established place of business in Scotland or were habitually resident in Scotland²³.

Creditors can also force the issue. A creditor can ask the court to make you bankrupt if you are apparently insolvent and owe them more than £3,000²², and petitions for sequestration from creditors or trustees are handled by the Scottish courts¹. During the Covid-19 pandemic the minimum debt for a creditor petition was raised to £10,000¹⁰. If a creditor is threatening to petition, free advice is available immediately, and there are ways to stop action, including the debt arrangement scheme and breathing space protections; a moratorium on debt recovery action also exists for individuals who have a mental illness under more recent legislation²⁴.

Fees: £0 for MAP, £150 for sequestration

MAP bankruptcy has no application fee: the AiB removed MAP application fees entirely, while debtor application costs for full administration were reduced from £200 to £150⁶. You will not pay a fee to go ahead with MAP bankruptcy⁴.

Full sequestration costs £150, a one off fee paid to the Accountant in Bankruptcy before your application is submitted³. The full amount needs to be paid before the application can go in³. The fee can be reduced to £0 depending on your financial situation or if you receive certain benefits³. One advice source instead describes a £50 fee for MAP that may be waived depending on your financial situation²⁵, but the official position is that there is no MAP application fee⁶.

Beyond the application fee, the main costs of bankruptcy are not fees at all: they are the assets and income contributions the trustee can claim, covered below. If you are worried about affording even a reduced fee, a money adviser can check what you would pay before you commit to anything. The general costs of all the formal solutions are compared in what debt solutions cost.

Debts that bankruptcy does not write off

Most debts are written off by bankruptcy, but some are not²². Even after discharge you remain personally liable for¹⁹:

• fines, penalties, compensation and forfeiture orders imposed by any court
• any debt incurred through fraud
• student loans, including those taken out after 1998
• maintenance payments to an ex spouse under a court order
• money owed to a creditor whose debt is secured on your property, where you wish to keep the security.

The same picture appears across the sources: child maintenance arrears, criminal fines, student loans, TV licence arrears, personal injury claims against you, fraudulent debts, debts taken out after the bankruptcy is awarded, and secured debts where you want to keep the secured item cannot be included². The Accountant in Bankruptcy confirms that specific debts including student loans, fines and debts incurred through fraud cannot be included¹².

This matters most for priority bills. Rent arrears owed before bankruptcy may be included, but rent falling due afterwards must be paid, and if you do not pay your rent you can be evicted⁴. Child maintenance arrears survive bankruptcy, and enforcement of them can be severe: goods can be taken from your home, money can be taken from your bank account, wages or benefits, you can be forced to sell your property, and a driving licence or passport can be taken²⁶. Before applying, it is worth reading which bills to pay first, because the debts that survive bankruptcy are usually the ones that need managing most carefully afterwards.

Your home, car and other belongings

What you keep depends on which route you take. In MAP bankruptcy you cannot be a homeowner at all, and your car must be worth £3,000 or less, with your other assets worth less than £2,000 in total and no single item over £1,000⁴. In most cases you can stay in your rented home as long as you continue to pay rent and follow your tenancy agreement⁴.

In full sequestration the trustee may sell your home or any property you own. They must decide within a year of your bankruptcy being awarded, and they normally have up to three years to sell it³. While your home is caught up in the bankruptcy, it is protected by an inhibition clause recorded on a register used by buyers' solicitors: you cannot transfer or sell the home or land, take out further secured credit against it, or use sale proceeds for anything other than your bankruptcy. This restriction expires three years after bankruptcy is awarded². The law for home repossession in Scotland is different from the rest of the UK²⁷, and Scottish home owners facing repossession have specific protections, including pre action requirements creditors must follow before taking action²⁸.

Two rules protect the process from people moving assets out of reach. You are not permitted to transfer assets for free or for less than they are worth during bankruptcy or in the five years leading up to your application; doing so risks a fine, a bankruptcy restriction order or a prison sentence, under what is called gratuitous alienation². Separately, the legislation voids certain diligences done shortly before bankruptcy: no arrestment, money attachment or attachment of your estate created within the 60 days before the date of sequestration is effective against the trustee, and no land attachment created within the six months before sequestration is effective²⁹.

Goods bought through hire purchase or conditional sale agreements may be included, depending on the terms of the contract. If the agreement includes a bankruptcy clause, you can return the goods or ask the trustee to continue making payments if they are essential².

Monthly contributions and money that arrives later

In MAP bankruptcy there is no monthly payment¹². In full sequestration, you may be asked to pay monthly amounts to the trustee, and this can last for four years³. If you are asked to pay a debtor's contribution order (DCO), it can last up to 48 months depending on what you have been asked to pay³. Contributions are worked out from what you can afford after essential living costs, using the standard budgeting tool used across Scottish debt solutions, described in budgeting for repayments.

Money that arrives later can also be claimed. In MAP bankruptcy, you could lose assets or lump sums of money you receive above a certain value, and this applies for up to four years after your bankruptcy is approved⁴. The same principle applies in full sequestration, which is why bankruptcy suits people whose situation is genuinely unlikely to improve, and why windfalls, inheritances and compensation payments should always be mentioned to the trustee.

The stages of full sequestration and when each one ends.

Your pension is treated separately. Future entitlement to a pension will not usually be affected by bankruptcy, and this covers almost all approved personal and occupational pensions¹⁹. Savings in a pension fund approved by HMRC are not classed as an asset, with exceptions such as excessive contributions, annuity income, lump sums already taken, or funds not registered with HMRC such as a foreign pension².

Restrictions on borrowing, business and your credit file

Bankruptcy brings restrictions that last as long as the bankruptcy does, and some that outlast it. While bankrupt, you cannot set up a limited company, act as a company director, act as a member of the Scottish Parliament, a member of any local council, a school board or a Justice of the Peace³. The same list includes membership of Parliament, including the Scottish Parliament, until you are officially discharged and any bankruptcy restriction order has ended².

There are rules on borrowing. You must tell a lender you are bankrupt if you apply to borrow more than £2,000, on your own or with someone else, and the rule also applies if you borrow any amount when you already have £1,000 of new debt since your bankruptcy began³. In MAP cases the disclosure rule applies to borrowing more than £2,000 until six months after the bankruptcy ends⁴. Bankruptcy conditions can be extended up to 15 years by a bankruptcy restriction order if you have behaved dishonestly or irresponsibly, for instance by hiding assets³; bankruptcy restrictions orders are covered in detail elsewhere.

Your credit file is affected for six years. Bankruptcy has a big impact on your credit score and will stay on your credit file for six years⁸. Records are automatically removed six years from the date the bankruptcy was awarded, unless extended by a bankruptcy restriction order². During this time you may find it harder to borrow money or access certain financial products, and loans you are offered will likely have a higher interest rate⁸. Your bankruptcy also appears on the public Register of Insolvencies: for at least two years in MAP cases⁴ and five years in full sequestration³.

Applying through an approved money adviser

You cannot apply for bankruptcy on your own. You apply through an approved money adviser or insolvency practitioner⁹, and you must speak to a money adviser before you can go bankrupt: they must sign your application forms to confirm bankruptcy is right for you¹⁹. An approved money adviser must meet the criteria set out in the Debt Arrangement Scheme regulations³¹. For sequestration specifically, an approved debt adviser will have to provide a certificate of sequestration before you can apply²².

The steps are these:

1. Speak to a free, approved money adviser, who assesses your debts, income and assets and checks whether bankruptcy is the right solution, or whether a protected trust deed, the Debt Arrangement Scheme or an informal payment arrangement fits better.
2. The adviser confirms which route you qualify for, MAP or full administration, and signs the application or issues a certificate of sequestration.
3. Pay the fee if there is one: £150 for full sequestration, nothing for MAP³.
4. The application forms are filled out and submitted to the Accountant in Bankruptcy².
5. Bankruptcy is usually awarded five days after submission³. No court appearance is needed for MAP⁴.

The stages of a debtor application, from first advice to the award of bankruptcy.

Free help is available at every stage. Free debt advice is funded across the UK, and in Scotland you can find details of agencies that give independent financial advice through official channels³², with extra help with money problems available through the Scottish welfare fund route³². Advice is free from charities and publicly funded services, and free debt advice explains what happens at an appointment. If you are unsure whether an adviser is genuine, how to tell if a debt adviser is legitimate lists the checks. Bankruptcy in England and Wales, and in Northern Ireland, follows different rules, and the closest equivalent to MAP elsewhere is a debt relief order³⁰.