If you make yourself bankrupt, your creditors write off your unsecured debts.  This will allow you to have a fresh start.

In order for you to apply for sequestration you must:

• Owe a total debt of £1,500 or more
• Be living in Scotland or have lived in Scotland sometime during the last year
• Not have been made bankrupt in the last 5 years
• Pay the application fee of £100

Bankruptcy normally lasts for a year. You cannot borrow any further credit and would have to declare any changes within your circumstances to the Accountant in Bankruptcy during this year. You may be asked to sell valuable assets, but you are able to keep most of the things you need for day-to-day living.

You can only apply for sequestration if you have had one of the following:

• A creditor has obtained a decree and has had a ‘charge for payment’ served on you and the 14 days allowed for payment have expired without making payment
• A creditor has obtained a ‘summary warrant’ against you for the recovery of rates or taxes and your goods have been subject to an attachment or an exceptional attachment order and 14 days have passed after the attachment without payment being made

If you’ve not had either of the above, you may qualify for sequestration under the ‘low income low asset’ (LILA) if your situation fits the criteria below. You must:

• Receive no more than the standard national minimum wage for a forty hour working week. This is currently equivalent to £232 a week
• Have no single asset worth more than £1,000 or assets totalling more than £10,000
• Not own or jointly own a house or any other property or land

Making yourself bankrupt is a big step to take and requires expert advice.  You can use our online debt counselling service, CCCS Debt Remedy, which will provide you with the most appropriate solution to your debt problem. Alternatively contact our free Helpline on 0800 138 1111.