One of two. Section 2(2) sets out the Minimal Asset Process for people with low debts and almost nothing to sell, and section 2(8) sets out full administration for everyone else.

The conditions are not a menu

Every condition on your route has to be met on the day the application is made. Your adviser works out which track fits before anything is submitted.

The two tracks side by side

The benefits route only works if those payments are your only income. Someone receiving universal credit alongside wages goes through the common financial tool assessment instead.

One figure on that table is commonly printed wrong, and one that is missing from it is printed even more often. The £3,000 minimum has been in section 2(8)(a) since 30 November 2016, and the Minimal Asset Process £1,500 floor stopped applying on 6 February 2023.

How much debt you need covers both, and the £25,000 ceiling has applied since 29 March 2021.

A vehicle you reasonably require and worth no more than £3,000 is left out of the Minimal Asset Process asset calculation by section 2(3)(b). Applying for a Minimal Asset Process deals with that route in detail.

The statement of undertakings

Section 2(8)(d) requires you to give a statement of undertakings. It includes an undertaking to pay the trustee, after the award, an amount determined using the common financial tool.

That is worth reading before you sign it rather than afterwards. It is the document that commits you to the contribution the assessment produces.

You must have been habitually resident in Scotland, or have had an established place of business here, at some point in the year before the application. Section 15(2) and section 15(8) make it a one-year look-back rather than a test of where you live today.

Why that wording matters both ways

Someone who moved to England last month may still be inside the year. Someone who moved to Scotland three months ago may not be, unless they have an established place of business here.

Nothing on the ranking pages for this query states the look-back at all. Ask your adviser to check the dates before anything is submitted.

One caution on reading the section yourself. Section 15(9) was omitted on 31 December 2020, and the as-enacted page on legislation.gov.uk still displays it.

Because the Act makes it a condition of the application. Section 2(8)(c) requires the advice of a money adviser for full administration, and on a Minimal Asset Process section 2(2)(f) makes a certificate for sequestration compulsory that only an authorised person can grant.

It is the advice that is compulsory

That is a different rule from the Debt Arrangement Scheme, where regulation 20(2)(a) requires the money adviser to make the application on your behalf. In sequestration the statutory condition is the advice you obtained, or the certificate an approved adviser grants you.

In practice the adviser prepares and submits it, and mygov.scot tells applicants to apply through an approved money adviser.

Nobody has to pay for it

Regulation 4 of the Bankruptcy (Scotland) Regulations 2016 names a citizens advice bureau in full membership of Citizens Advice Scotland and a local authority money advice team among the approved classes, and both are free. National Debtline and the other national services will talk the options through with you at no charge as well.

Ask which category of approved adviser the person falls into before you rely on anything. That is the question that settles whether they can grant you a certificate.

If a firm asks you to pay for the advice the statute requires anyway, that is a reason to ring a free service and compare what you are told. The application fee is a separate question.

What to take to the appointment

• Your income, including benefits, overtime and any self-employed earnings.
• What you actually spend, because the assessment is built from your figures.
• A full list of creditors and balances, with any recent letters.
• Details of anything you own, including a vehicle, savings and any property.
• Anything already running against you, such as an earnings arrestment or a charge for payment.

Ask which category of approved adviser the person falls into if you are not sure. An adviser outside the approved categories cannot support the application, however experienced they are.

A document granted by a money adviser under section 9 certifying that you cannot pay your debts as they become due. Regulation 10 prescribes 30 days.

It exists so you do not have to wait to be chased

Without it, the usual way into a full administration application is apparent insolvency, which generally means a creditor has already acted. The certificate puts the timing in your hands.

Regulation 9 settles the question people ask next: no fee is chargeable for granting a certificate for sequestration.

When the 30 days actually ends

Section 2(10) defines the prescribed period as one ending immediately before the date the debtor application is made. So the certificate has to be live on the day the application goes in, not merely granted at some point beforehand.

Get the evidence together first and ask for the certificate near the end. What a certificate for sequestration is covers who can grant one and what happens if the period lapses.

The three gateways for a full administration application

A Minimal Asset Process is different: section 2(2)(f) makes the certificate compulsory, with no alternative. The certificate route explains why.

£150 for full administration and nothing for a Minimal Asset Process, under the 2023 Regulations, in force 6 February 2023.

The fee, the exemptions and the things that are always free

Minimal Asset Process bankruptcy carries no application fee at all. The £150 belongs to full administration.

Three commercial pages ranking for sequestration queries print £200, which was the figure until 29 March 2021. Whether the fee can be waived lists the qualifying benefits, and what a sequestration costs in total covers the trustee’s side.

The saving in the 2023 Regulations matters if you are reading old correspondence. The changes have no effect where the application was made before 6 February 2023.

It is considered administratively and either awarded or refused. No published timescale for the decision was found, and mygov.scot does not give one.

What changes on the day of the award

The date of sequestration is the date that matters, and on a debtor application that is the date of the award. Section 90(1)(a) requires the debtor contribution order to be made at the same moment.

The deduction from your wages stops then, not when you apply. Section 72(2) of the Debtors (Scotland) Act 1987 does that by operation of law, and what sequestration does to diligence covers the rest of it.

If you are relying on apparent insolvency instead

Section 16 lists the events that constitute apparent insolvency. The one most people meet is a charge for payment where the days of charge expire without payment.

Granting a trust deed constitutes it too, as does the revocation of a debt payment programme under the Debt Arrangement Scheme.

Section 2(9) closes one obvious loop. You are not apparently insolvent by reason only of granting a trust deed or of giving notice to creditors under section 16(1)(c).

So the certificate route and the apparent insolvency route are alternatives, and your adviser will tell you which one your paperwork already supports. Neither of them is a decision on the application itself.

The gap before the award

A statutory moratorium gives six months of protection and you get one per rolling 12 months. It stops service of a charge for payment, stops new diligence and stops creditor petitions for sequestration.

It does not stop an earnings arrestment that was already running. Section 197(5)(d) of the Bankruptcy (Scotland) Act 2016 lets a creditor carry on executing an earnings arrestment, a current maintenance arrestment or a conjoined arrestment order that came into effect before the moratorium began.

So a moratorium buys time against everything else while the paperwork is prepared. It does not stop a deduction that is already coming off your pay.

The alternatives, your home and your job, and the timing. Sequestration is formal insolvency and it is recorded publicly, so it is worth being sure.

Test the alternatives properly

Ask about the Debt Arrangement Scheme and a protected trust deed on the same figures.

Bankruptcy against a trust deed and bankruptcy against the Debt Arrangement Scheme each set out where the answer turns.

Property, work and the people you live with

If you own property, get the family home position explained before you apply rather than after. Whether you lose your home sets out the three-year rule and the consent requirement.

If you work in a regulated role, check your contract and your professional body’s rules first. A non-debtor partner should take their own advice where a home is jointly owned.

How long the case will run

Discharge normally comes twelve months after the award, though a contribution order can run for 48 months and outlast it. How long sequestration lasts sets out each clock.