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- Is money advice a legal requirement?
- Does the adviser apply for you, or do you?
- Who counts as an approved money adviser?
- Do you have to pay for the advice?
- What does the appointment actually cover?
- Does the same rule apply if a creditor petitions?
- What happens if you try to apply without advice?
- Related guides
- Frequently asked questions
Yes, and the two routes get there differently. Section 2(8)(c) of the Bankruptcy (Scotland) Act 2016 requires the advice of a money adviser for full administration, and a Minimal Asset Process needs a certificate for sequestration under section 2(2)(f) that only an authorised person can grant.
Either way an approved adviser has to be involved before a debtor application can be made. It is not a recommendation and there is no version of the process that skips it.
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That surprises people who expect bankruptcy to be a form you fill in alone. In Scotland it is not.
The requirement was put there deliberately. Sequestration is irreversible in most of its effects, and someone qualified has to look at the alternatives with you first.
The advice does not have to cost anything, and the certificate you may need is free by regulation. How you apply sets out the sequence around it.
Is money advice a legal requirement?
For a debtor application, yes. Both routes into section 2 list it among the conditions that have to be met on the day the application is made.
Two routes, two provisions
Section 2(8)(c) covers full administration and requires advice obtained in accordance with section 4(1). A Minimal Asset Process is caught by section 2(2)(f) instead, which makes a certificate for sequestration a condition of the application.
Nothing in section 2(2) mentions a money adviser, and pages that cite section 2(2)(c) for it have the wrong paragraph. That one is the £2,000 total asset cap.
The practical answer is the same on both routes. An approved adviser has to be involved before the application is made, whatever the size of the case.
Why Parliament put it there
Sequestration is permanent in its effect on the estate and long lasting in its effect on your credit file. The condition puts a qualified person between a difficult month and an irreversible step.
It also catches the cases where something less drastic works. That is the part of the appointment most people find useful afterwards.
Where the requirement sits
| The route | What is required | Where it comes from |
|---|---|---|
| Full administration debtor application | You must have obtained the advice of a money adviser in accordance with section 4(1) | Section 2(8)(c) |
| Minimal Asset Process debtor application | A certificate for sequestration is compulsory, and only an authorised person can grant one | Section 2(2)(f), with section 9 |
| The certificate for sequestration | Granted by an authorised person, and the categories are set by regulation 4 | Sections 9 and 4(2)(b) |
| A creditor's petition | Not gated by money advice, because it is not your application | Section 2(1)(b) |
| A debt payment programme | The money adviser makes the application on your behalf | Regulation 20(2)(a) of the 2011 Regulations |
A Minimal Asset Process goes further, because the certificate for sequestration is compulsory as well. What that certificate is explains what it does.
Does the adviser apply for you, or do you?
The statutory condition is the advice, not the applicant. Section 2(8)(c) requires that you have obtained the advice, and in practice the adviser prepares and submits the application.
This is where the Debt Arrangement Scheme rule gets imported by mistake
You cannot apply on your own. Regulation 20(2)(a) requires the application to be made by a money adviser on the debtor’s behalf.
That is the scheme’s rule, and it is written into its own regulations. The Bankruptcy (Scotland) Act 2016 does not say the same thing about a debtor application.
Whether you need an adviser for a debt payment programme sets out the scheme side, and the two rules are worth keeping apart.
What that means in practice
mygov.scot tells applicants to apply for bankruptcy through an approved money adviser, and that is how nearly every case is done.
The practical answer and the statutory answer point the same way. You need the adviser, and the paperwork goes in through them.
Who counts as an approved money adviser?
The categories are prescribed by regulation 4 of the Bankruptcy (Scotland) Regulations 2016. They are insolvency practitioners and their authorised staff, money advisers at organisations accredited at Type 2 or above against the Scottish National Standards, advisers approved for the Debt Arrangement Scheme, money advisers at a citizens advice bureau in full membership of Citizens Advice Scotland, and money advisers working for a local authority.
How to check before you rely on anyone
Ask which category of approved adviser the person falls into, and ask it at the first contact. A properly accredited adviser will answer without hesitation.
An adviser outside the approved categories cannot support the application, however experienced they are. Only an authorised person can grant a certificate under section 9.
Free approved advice exists everywhere in Scotland
Citizens advice bureaux, council money advice teams, StepChange, National Debtline and Advice Direct Scotland all provide it at no charge.
Citizens Advice Scotland’s bankruptcy pages are a reasonable starting point, and whether to use a free charity or a paid adviser deals with the choice itself.
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Do you have to pay for the advice?
No, and the certificate is free by regulation. Regulation 9 of the Bankruptcy (Scotland) Regulations 2016 says no fee is chargeable for granting a certificate for sequestration.
Free against paid, item by item
| What it is | The position | The detail |
|---|---|---|
| The money advice itself | Free at a citizens advice bureau or a council money advice team | Some commercial firms charge for it |
| The certificate for sequestration | No fee is chargeable for granting one | Regulation 9 says so in terms |
| Debt Arrangement Scheme advice | An adviser may not charge an individual a fee for it at all | Regulation 12(2), since 4 November 2019 |
| The application fee | £150, or nothing at all | Exempt on prescribed benefits or nil surplus income |
| A Minimal Asset Process application | No fee since 6 February 2023 | The fee was removed rather than waived |
On the scheme side the rule is stricter still. Since 4 November 2019 a money adviser may not charge an individual a fee for that work at all, under regulation 12(2) as substituted by SSI 2019/315.
Why free does not mean lesser
The categories that make an adviser approved are the same whether the service charges or not. A citizens advice bureau adviser and an insolvency practitioner are working to the same statutory conditions.
What differs is what happens next. A firm that offers only one product will compare fewer options than a service that offers none of them commercially.
The warning sign worth naming
If a firm is charging you for the advice the statute requires anyway, ring a free service and compare what you are told. Ask for any charge in writing before you agree to anything.
The application fee is a separate question altogether. Whether the £150 can be waived sets out the exemptions, and what a sequestration costs separates the four costs of a case.
There is no Minimal Asset Process fee at all since 6 February 2023, under the 2023 Regulations.
What does the appointment actually cover?
A full review of your money rather than a signing session. Expect to be asked for everything, and to be asked to evidence it.
What you will be asked for
| The area | What is looked at | Why it matters |
|---|---|---|
| Your income | Wages, benefits, overtime and any self-employed earnings | It drives the contribution assessment |
| Your expenditure | What you actually spend, against the published trigger figures | Understated expenditure produces a surplus you do not have |
| Your debts | Every creditor and balance, with interest and charges | It decides which thresholds you meet |
| What you own | Vehicles, savings, pensions and any property | It decides which route is open |
| Enforcement already running | An earnings arrestment, a charge for payment, a bank arrestment | It decides how urgent the timing is |
| Who else is liable | Any joint debts | It affects what a solution actually achieves |
Take payslips or award letters, recent bank statements and every creditor letter you have. Accurate expenditure figures matter as much as the income ones.
What to bring
- Payslips, or your most recent benefit award letters.
- Two or three months of bank statements.
- Every creditor letter, including any charge for payment.
- A rough list of what you own and what it would sell for.
Bring the paperwork rather than the summary. Dates on enforcement documents decide what is still possible and they are easy to misremember.
The assessment behind it
The adviser runs the common financial tool, which regulation 15(1) prescribes.
The prescribed tool is the Common Financial Statement, under regulation 15(1) of the Bankruptcy (Scotland) Regulations 2016.
Most sources name the Standard Financial Statement, which is the tool used elsewhere in the United Kingdom. Regulations that would have moved Scotland to it were drafted in 2018 and never made.
The result decides whether a contribution would be payable and whether the Minimal Asset Process is open to you. How a contribution is calculated sets out the arithmetic.
The options that should be on the table
| The option | What it does | The public record |
|---|---|---|
| Minimal Asset Process | A short form of sequestration for low debts and low assets | Register of Insolvencies |
| Full administration sequestration | Your estate passes to a trustee and a contribution is assessed | Register of Insolvencies |
| Protected trust deed | A voluntary arrangement your creditors can block | Register of Insolvencies |
| Debt Arrangement Scheme | A statutory repayment programme with interest and charges frozen | The DAS Register |
| An informal arrangement | Not statutory, so it does not stop diligence | No register |
A good appointment does not assume the answer. Sequestration against a trust deed and sequestration against the Debt Arrangement Scheme are the two comparisons that decide most cases.
Does the same rule apply if a creditor petitions?
No. The money advice condition sits in section 2 and governs debtor applications, so a creditor’s petition is not gated by it.
You should still get advice, and quickly
A creditor owed at least £5,000 can petition where your apparent insolvency was constituted in the previous four months. Whether a creditor can make you bankrupt sets out both conditions.
Advice at that point is about what you can still do rather than about whether to apply. The deadlines are short and they turn on dates in your own paperwork.
What advice can still achieve at that stage
Paying or settling the debt founded on, or taking a statutory moratorium, may both be open depending on the dates. So may an application of your own.
None of those decides itself. The value of the appointment is that someone works out which are genuinely available to you and by when.
Applying yourself may still be the better route
A debtor application puts the timing and the trustee nomination in your hands. How much debt you need and how you apply set out what that would involve.
What happens if you try to apply without advice?
The application cannot meet the conditions. Money advice is one of the tests the Accountant in Bankruptcy applies, in the same way as the debt threshold.
The practical cost of skipping it
It is not only a refusal. It is entering a formal insolvency without anyone having checked whether it is the right one for your income, your assets and the people you live with.
For a Minimal Asset Process it is impossible in any event, because only an authorised person can grant the certificate that section 2(2)(f) requires.
What the Accountant in Bankruptcy is checking
Every condition on the route you are using, on the day the application is made. Money advice is one of them and it is no more optional than the debt figure.
That is why the paperwork matters as much as the conversation. An application that cannot evidence the conditions is not an application that can be awarded.
What an adviser cannot do
- Award sequestration. That is a decision for the Accountant in Bankruptcy.
- Promise that any particular debt will be written off.
- Guarantee what happens to your home.
- Certify inability to pay where the figures do not show it.
What they can do is set out the consequences honestly before you decide, and whether you need an adviser for a Minimal Asset Process covers the same ground on the shorter route.
Frequently asked questions
Can you go bankrupt in Scotland without seeing an adviser?
Not by your own application. Section 2(8)(c) requires that you obtained the advice of a money adviser in accordance with section 4(1) for full administration, and section 2(2)(f) makes a certificate for sequestration compulsory for a Minimal Asset Process.
Does the adviser make the application, or do you?
The Act’s condition is that you obtained the advice, and in practice the adviser prepares and submits the application. That is different from the Debt Arrangement Scheme, where the regulations require the adviser to apply on your behalf.
Does a bank or a debt firm count as a money adviser?
Only if the person falls within one of the approved categories set by regulation. Ask which category applies before you rely on anything you are told.
Do you have to pay for the advice?
No. Citizens advice bureaux and council money advice teams are free, and regulation 9 says no fee is chargeable for granting a certificate for sequestration.
How long does the appointment take?
There is no statutory length, and it often runs across more than one appointment because the common financial tool assessment needs accurate figures.
Is advice needed where a creditor petitions?
No, because the condition governs debtor applications. Advice is still worth getting urgently, since the dates on the paperwork decide what remains possible.
Does taking advice stop sheriff officers in the meantime?
No. Advice by itself has no effect on diligence, and protection comes from a statutory moratorium or from the award of sequestration itself.
What if the adviser says sequestration is not right for you?
Ask what they recommend instead. A refusal to certify inability to pay usually means the figures point towards a repayment route rather than an insolvency.
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Written as general information about Scottish debt law rather than regulated financial or legal advice, and your own circumstances may change the answer. Free, impartial help is available from Citizens Advice Scotland, StepChange, National Debtline and Advice Direct Scotland.