Does Discharge From Sequestration End Everything After 12 Months?
No. Discharge releases you from the debts you owed at the date of sequestration, and the trustee carries on, the contribution order carries on, and the debts in section 145(3) are never written off.
It is also not a date. Section 137 gives the Accountant in Bankruptcy a power to discharge at any time after the twelve-month point, which is a decision rather than a deadline.
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Counting down to your discharge? Check what actually ends at twelve months.
Free, confidential and no obligation.Getting that distinction right changes what you plan for. The most common mistake in this market is treating twelve months as the end of the case.
What follows separates your discharge, your trustee’s discharge and everything that outlives both. How sequestration works covers the process itself.
Is discharge from sequestration automatic after 12 months?
Not in a full administration. Section 137(2) says the Accountant in Bankruptcy may discharge the debtor at any time after the date which is 12 months after the award.
Read the two words that carry it
It is a decision rather than a date. Sections 137 and 138 give a discretion exercisable at any time after twelve months, with a review and an appeal if it goes against you.
May, and at any time after. Neither of those makes twelve months a date on which anything happens by itself.
The steps before the certificate
| The stage | What happens | Where it comes from |
|---|---|---|
| Full administration, a private trustee | The Accountant in Bankruptcy may discharge at any time after twelve months from the award | Section 137(2) |
| The trustee's report | Sent without delay after the ten-month point | Section 137(4)(a) |
| Representations on that report | Within 28 days beginning with the day the notice is given | Section 137(6)(b) |
| When a discharge takes effect | Not before the expiry of 14 days beginning with the day of notification | Sections 137(7) and 138(7) |
| Full administration, the Accountant in Bankruptcy as trustee | The same twelve-month power, with a duty to decide as soon as practicable after that date | Sections 138(2) and 138(3) |
| A refusal, where the Accountant in Bankruptcy is trustee | Revisited as soon as practicable after twelve months from the refusal | Section 138(6) |
| Minimal Asset Process | You are discharged six months after the award, automatically | Section 140(1) |
Where the Accountant in Bankruptcy is itself the trustee, section 138 does the same work with a different procedure, and it must decide as soon as practicable after the twelve-month date.
Minimal Asset Process is the automatic one
Section 140(1) says the debtor is discharged on the date which is 6 months after the award. That is is rather than may, and there is nothing to apply for.
You may then apply for a certificate of discharge under section 140(2). How long a sequestration lasts sets the two timetables side by side.
What does discharge actually end?
Your liability for the debts you owed on one particular day. Section 145(1) discharges you of all debts and obligations you had contracted, or were liable for, at the date of sequestration.
For most households that is the bulk of it
Credit and store cards, personal loans, catalogue debt, overdrafts, council tax arrears and utility arrears are all listed as included by National Debtline and by Citizens Advice Scotland.
You also stop being an undischarged bankrupt, which ends the restrictions that turn on that status. A bankruptcy restrictions order runs separately and does not.
What it does not end
Discharge frees you from the debts it covers, but it does not end the sequestration. Your trustee carries on, a debtor contribution order carries on, and the estate is still being dealt with.
Section 93(2) and the sections dealing with the trustee’s own discharge carry the point, and the Accountant in Bankruptcy’s guidance says the same thing in blunter terms. What a trustee in sequestration does covers the work that carries on.
What keeps running after you are discharged?
Six things, and the contribution order is the one that surprises people most. None of them stops because a certificate has been granted.
The list, with its provisions
| What continues | How long | Where it comes from |
|---|---|---|
| Your debtor contribution order | The payment period is 48 months beginning with the date of the first payment, and the requirement to pay applies irrespective of your discharge | Sections 91(2)(a) and 93(2) |
| The trustee's administration of the estate | Until the estate has been dealt with and the trustee is separately discharged | Sections 148 to 151 |
| The debts on the section 145(3) list | They are not discharged at all | Section 145(3) |
| A student loan | Not discharged, by the separate route of section 145(7) | Section 145(7) |
| A secured creditor's rights over property | Your personal obligation goes and the security does not | Section 145(5) |
| Your duty to co-operate with the trustee | Preserved expressly, and the word debtor includes a discharged debtor | Sections 145(3)(g) and 215(6) |
| Your entry on the Register of Insolvencies | No statutory retention period exists in the Act or the regulations | Section 200 and regulation 30 are both silent |
The contribution order is the big one
Section 93(2) states that the requirement to pay the debtor’s contribution applies irrespective of the debtor’s discharge.
It normally runs for 48 months, which is longer than the twelve months to discharge. The payments carry on after you are discharged.
So a person discharged at twelve months can have around three years of payments still ahead. How a debtor contribution order is calculated sets out the method and the review rights.
The debts that were never covered
Section 145(3) lists what survives. Fines and other court penalties, debts obtained by fraud, and aliment or a periodical allowance payable on divorce are not written off.
Student loans are not written off either, by a different route. Section 145(7) leaves the student loan regulations untouched rather than listing the debt as an exception.
Section 145(5) separately preserves a secured creditor’s right to enforce a security, so a mortgage over your house is unaffected by the discharge of your personal obligation.
Each category is worked through in which debts are not written off.
And a duty that was designed to outlive it
Section 215 requires you to take every practicable step needed to let the trustee perform the trustee’s functions, and section 215(6) says debtor there includes a debtor discharged under the Act.
Still paying a contribution after your discharge? Get free help in 60 seconds
Free, confidential and no obligation.How is your trustee’s discharge different from yours?
It is a separate event, at a later date, about something else entirely. Yours is about your debts and the trustee’s is about the administration of the estate.
Three events people merge into one
| The event | What it does | When it happens |
|---|---|---|
| Your discharge, full administration | Releases you from the debts you owed at the date of sequestration | A decision by the Accountant in Bankruptcy, exercisable at any time after twelve months |
| Your discharge, Minimal Asset Process | The same release | Automatic at six months, with six months of credit conditions afterwards |
| Your trustee's discharge | Releases the trustee in respect of the administration of the estate | A separate and later event, once the estate has been dealt with |
| A bankruptcy restrictions order | Restrictions imposed on conduct grounds | Two to five years where the Accountant in Bankruptcy makes it, five to fifteen where the sheriff does |
The trustee’s discharge comes under sections 148 to 151, once the estate has been dealt with. It is not tied to your twelve months.
Why the timing matters to you
The Accountant in Bankruptcy’s debtor guide says details of your bankruptcy remain on the Register of Insolvencies for one year after your trustee obtained their discharge.
So the register entry is tied to that later date rather than to your own, and no statutory period exists at all. Whether your sequestration is public sets out what each source says.
The post-discharge credit conditions belong to one route only
Section 146 applies where a debtor is discharged under section 140, which is the Minimal Asset Process. A full administration discharge under section 137 or 138 does not carry it.
For six months from the date of discharge you must tell anyone providing you with credit that you are required to comply with the section 146 conditions, before obtaining credit of £2,000 or more, or any amount at all while you owe £1,000 or more.
A first failure to comply extends the restriction period from six months to twelve. The offence arises only on a further failure during that extended period.
Section 146 has been in force since 30 November 2016 and neither of those figures has been changed since. They are not the same rule as the disclosure duty that runs while you are undischarged.
Can your discharge be delayed or refused?
Yes, and the machinery for it is a discretion rather than a set of rules. What you will read elsewhere as categories is the Accountant in Bankruptcy’s own guidance.
The statutory position
Sections 137 and 138 confer a power exercisable at any time after twelve months, with review and appeal under section 139. Section 141 deals with deferral where the debtor cannot be traced.
There is no provision setting out grounds of refusal. The decision is made on the trustee’s report and on any representations made about it.
What the guidance adds, and what it is
The categories the Accountant in Bankruptcy uses when it defers a discharge come from its own notes for guidance rather than from the Act.
Those categories are worth knowing about because they describe how the decision is taken in practice. They are not a statutory test and should never be given a section number.
What actually helps
Paying the contribution, answering the trustee and completing anything you are asked to complete are the three things within your control. How a debtor contribution order is calculated covers what to do if the payment has stopped being affordable.
What happens to the family home if the case runs on?
There is a three-year long stop. Section 112(2) reinvests your right or interest in you at the end of three years from the date of sequestration.
It is a long stop on inaction, not a guarantee
| The point | The position | Where it comes from |
|---|---|---|
| The rule | At the end of three years from the date of sequestration, your right or interest ceases to form part of the estate and is reinvested in you | Section 112(2) |
| It happens without a transfer | No disposition, conveyance or assignation is needed | Section 112(2)(b) |
| It is defeated by trustee action | Nine listed steps stop it, including a sale, concluded missives, completing title and starting proceedings | Section 112(3) |
| It can be extended | The sheriff may substitute a longer period on the trustee's application | Section 112(6) |
| What that makes it | A long stop on trustee inaction rather than a promise you keep the house | Read section 112 as a whole |
Nine separate steps by the trustee defeat it, and the sheriff can substitute a longer period. Do not read section 112 as saying you keep your home after three years.
Ask what is happening rather than waiting
Where heritable property is still held by the estate at your discharge, ask the trustee in writing what the position is. Whether you lose your home in a sequestration deals with the whole question.
What should you do once you are discharged?
Get the certificate, then find out what is still running. Four questions cover almost everything.
The four questions to put in writing
- When does the contribution order end, counting 48 months from the date of the first payment?
- Has the trustee been discharged, and if not, what is outstanding?
- Is any heritable property still held by the estate?
- Which of my debts survived, so I know what still has to be paid?
Keep the certificate of discharge itself. Which jobs sequestration affects explains why being able to show the position is resolved is worth more than an explanation.
Two records outlast the case and they are unrelated
The register entry has no statutory period and the published practice ties it to the trustee’s discharge. How sequestration affects your credit file deals with the other record, which is held by the credit reference agencies rather than by anyone official.
What the sequestration did for you is still worth saying
An earnings arrestment ended on the date of the award and could not be started again for a debt claimable in the sequestration. What sequestration does to diligence sets that out.
Discharge is a real milestone and it does the most important job of all. It just does not close the case.
Frequently asked questions
Am I automatically discharged 12 months after sequestration in Scotland?
Not in a full administration. Section 137(2) says the Accountant in Bankruptcy may discharge you at any time after the date which is 12 months after the award, following a trustee report at ten months and 28 days for representations.
Do my payments stop when I am discharged?
No. Section 93(2) says the requirement to pay a debtor contribution order applies irrespective of your discharge, and the payment period is 48 months beginning with the date of the first payment.
Which debts are not written off by my discharge?
Section 145(3) preserves Crown fines and penalties, justice of the peace court fines, compensation orders, forfeited sums, liabilities incurred by fraud or breach of trust, aliment and your duty to co-operate. Student loans survive by the separate route of section 145(7).
Is my trustee discharged at the same time as me?
No, it is a separate and later event under sections 148 to 151, once the estate has been dealt with. Your discharge releases you from the debts and the trustee’s discharge is about the administration of the estate.
Do the credit disclosure conditions apply after a twelve-month discharge?
No. Section 146 applies only where a debtor is discharged under section 140, which is the Minimal Asset Process, and it runs for the six months beginning with the date of discharge.
Can my discharge be refused?
Sections 137 and 138 give a power rather than a duty, so a discharge can be deferred. The categories the Accountant in Bankruptcy uses come from its own notes for guidance rather than from the Act, and review and appeal lie under section 139.
How long does my sequestration stay on the Register of Insolvencies?
Neither section 200 nor regulation 30 sets a period. The Accountant in Bankruptcy’s published practice is one year after the trustee’s discharge, and mygov.scot gives different figures.
Do I keep my home after three years?
Section 112(2) reinvests your right or interest in you at the end of three years, but nine listed steps by the trustee defeat that and the sheriff can substitute a longer period. Treat it as a long stop on inaction rather than a guarantee.
Related guides
- Which Debts Are Not Written Off By Sequestration In Scotland? The short statutory list discharge never touches, where student loans and aliment sit, and what happens to a secured debt.
- How Is A Debtor Contribution Order Calculated In Sequestration? How the common financial tool sets your surplus, what spending can be allowed above the triggers, and what a payment break does.
- How Long Does Sequestration Last In Scotland? When discharge comes, why twelve months is a decision rather than a date, what carries on afterwards, and how long the record lasts.
- Is Your Sequestration Public On The Register Of Insolvencies? What the register shows, who can search it and for how long, why the entry outlasts discharge, and how it differs from a credit file.
- What Does A Trustee In Sequestration Do? Who acts as your trustee, the section 50 duties, what happens to the things you own, and when the trustee's job finally ends.
- Will You Lose Your Home If You Are Sequestrated In Scotland? What passes to the trustee, when a sale needs your agreement, the three-year rule for the family home, and what little equity changes.
- How Does Sequestration Affect Your Credit File In Scotland? Why six years comes from agency policy rather than statute, how the entry reaches your file, and what happens to the accounts behind it.
- Which Jobs And Professions Does Sequestration Affect In Scotland? The five roles closed off by statute, what the company director rule says, where the position is unresolved, and how long it lasts.
- Does Sequestration Stop Sheriff Officers And Other Diligence? What an award ends, what a moratorium does before it, which debts can still be enforced, and what replaces the deduction.
- How Does Sequestration Work In Scotland? The three routes in, who becomes your trustee, what you pay, what happens to the things you own, and what discharge does not clear.
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.