Sequestration is the Scottish equivalent of Bankruptcy.

Your assets are transferred into a trust, similar to bankruptcy in England and Wales. Instead of the Official Receiver or Insolvency Practitioner, your trust is run by the Accountant in Bankruptcy.

A creditor can apply for your sequestration if it is owed more than £1,500, although two or more creditors can act together if you owe then £1,500 or more between them.

You can apply for your own sequestration if you owe more than £1,500 and the creditor has served you with legal notices and the time period detailed in the notices has passed.

Sequestration usually lasts for 1 year although it can be extended by a further 2 years.

There are similar restrictions to those in England and Wales regarding what you can and cannot do during sequestration. For example, you must tell a lender that you are bankrupt if you apply for credit, but in Scotland the limit is £250.