That is the short answer and it is the one most people are dreading. The detail is worth reading, because vesting is not the same as your bank freezing the account and the two get merged constantly.

Money that arrives after the award is a separate question again, with a different provision behind it. That is where most of the confusion sits.

Yes, by operation of law. Section 78(1) vests your whole estate in the trustee by virtue of the appointment, with no separate order and nothing for the trustee to apply for.

What counts as your whole estate

Section 79(1) defines it as your whole estate at the date of sequestration, wherever situated, including any income or estate vesting in you on that date.

A credit balance is caught by that. The Accountant in Bankruptcy’s guide to what happens to the things you own lists money and savings first among assets, and says control of them passes to your trustee.

Savings are the easiest thing the trustee has to deal with

There is nothing to value and nothing to sell. What a trustee does covers the wider job of recovering and realising the estate.

That is why the answer here is blunter than the answer about a car or a house. Cash needs no market and no negotiation.

No. Section 88 is the only limitation on vesting in the Act, and every category in it is a physical article or property held on trust.

What section 88 actually protects

Sections 88(1)(a) and (b) work by reference to section 11(1) of the Debt Arrangement and Attachment (Scotland) Act 2002 and to the non-essential asset test in Part 3 of that Act. Neither reaches money.

The figures people quote come from the Accountant in Bankruptcy

The Accountant in Bankruptcy’s debtor guide, in its version of 26 March 2024, says you can keep tools you need for your trade up to a value of £1,000, and that you may be able to keep a vehicle you reasonably require worth no more than £3,000.

We attribute both to the Accountant in Bankruptcy rather than to the statute, because the current text of the 2002 provision was not obtained. Either way, the point for savings is unchanged.

The statutory figure behind the vehicle one is £1,000 rather than £3,000, and our page on keeping a car sets out why £3,000 is the Accountant in Bankruptcy’s practice figure.

No hardship allowance, no minimum balance

There is no monetary exemption anywhere in the Act, no protected minimum balance and no hardship allowance. Anyone telling you otherwise is describing a different jurisdiction.

Nothing published says whether a trustee ever leaves a working balance in practice, so ask yours. How a contribution is calculated covers what you are allowed to live on afterwards, which is a separate calculation.

That is your bank’s decision, not the Act’s. Nothing in the Bankruptcy (Scotland) Act 2016 freezes a bank account, and what the Act does instead is put a duty on the trustee.

Vesting against freezing

Section 86(9) requires the trustee to serve a notice on the bank once it knows of vested funds held there, and section 86(8) protects the bank for transactions entered into before that notice arrives.

What the guidance says, and how carefully it says it

mygov.scot and the Accountant in Bankruptcy both use the word may. Neither says a bank will freeze an account, and neither says how often it happens.

Neither says what a replacement account would look like either. Whether you can have a bank account while bankrupt deals with that in full.

What that means practically

Sort your banking out before the award rather than after it. A rent or council tax direct debit bouncing in the first month is the avoidable problem here.

Money held on trust does not vest at all. Section 88(1)(c) takes property held on trust by the debtor for any other person out of the estate entirely.

The joint account question is not answered anywhere

No source addresses how a jointly owned item is counted, whether at its full value or at your share of it. A joint bank account is the case most people ask about and it is not answered anywhere published.

So we are not going to tell you it is halved and we are not going to tell you it is counted in full. Tell your money adviser about every account before the application goes in.

Keep the evidence

Money a relative asked you to hold, a tenant’s deposit or benefits paid for a child are the cases where the trust point may matter. Whatever shows where the money came from and what it is for is worth keeping.

That is a conversation to have before you apply rather than afterwards. How sequestration works sets out the stages and where the disclosure happens.

Income received afterwards is yours. Section 85(1) vests income received on a relevant date in the debtor rather than the trustee, subject only to the contribution machinery.

The provision pulling the other way

Property you acquire after sequestration can still vest in the trustee. The window runs for four years from the date of sequestration.

The test is not whether it is a windfall. It is whether the thing would have vested had you owned it on the date of sequestration, and money would.

So wages are not acquirenda and an inheritance is. What happens if money arrives while you are bankrupt takes the test apart properly.

Where the line falls in a single account, nobody has said

Money in the account at the date of sequestration is estate. Wages paid in afterwards are yours under section 85(1).

Nothing read says how the two are separated inside one current account, and no tracing rule was found. That is the most practical question a reader has here and it is genuinely unanswered.

Which makes the reporting duty the safe course

You must tell your trustee immediately, under section 87(1), and failing to do so is a criminal offence rather than merely a breach of the rules.

Section 87(1) catches assets acquired on a relevant date and any other substantial change in your financial circumstances. Section 87(4) then makes a dealing with vested estate of no effect against the trustee.

Very often, yes. Section 2(2) caps total assets at £2,000 and any single asset at £1,000, so a savings balance can push an application into full administration on its own.

The thresholds

The Accountant in Bankruptcy’s evidence checklist treats savings above £1,000 across all your accounts as defeating a Minimal Asset Process application. That is its practice rather than something the Act states.

Which route you fall into changes the length, the cost and the contribution. Choosing between the two routes compares them, and what happens to savings in a Minimal Asset Process covers the entry test in detail.

What nothing published answers

The ISA question is in that list for a reason. How assets are valued records the same gap, and no tax wrapper appears anywhere in section 88.

Moving money out of your name. Section 218(3) and (4) make it an offence to conceal, dispose of or remove estate from Scotland during the relevant period, unless you show it was not done to prejudice creditors.

It also feeds a restrictions order

Section 156(2) names alienations and preferences a creditor could challenge among the matters the decision maker has regard to when considering a bankruptcy restrictions order.

This is not aimed at anyone in particular. It is the most common piece of well-meant advice from friends and family, and it causes real trouble.

What to do instead

• List every account and balance for your money adviser, including ones you rarely use.
• Ask whether your figures point to a Minimal Asset Process or to full administration before anything is submitted.
• Ask what will happen to your banking, and open a replacement account early if you need one.
• Keep paying rent, council tax and utility bills, which stay payable in full.

Where to get that advice free

Citizens Advice Scotland, StepChange, National Debtline and Advice Direct Scotland all do this work at no charge. If your savings sit near the limits, how a home is treated and what happens to a pension are the other two questions worth asking at the same time.