It satisfies one of the statutory conditions for a debtor application. Section 2(2)(f) makes it compulsory for a Minimal Asset Process, and section 2(8)(e) makes it one of three routes into full administration.

Why the Act needs one at all

Scottish law does not let anyone be sequestrated simply because they would like to be. You have to show one of a small number of qualifying facts.

The certificate is the one that does not depend on a creditor doing something to you first. That is its whole purpose.

What the certificate actually certifies

One thing only: that on the figures in front of the adviser, you cannot pay your debts as they become due. It says nothing about how much you owe or what you own.

That is why it can be granted quickly once the evidence is together. It is a conclusion from your figures rather than an investigation.

The three gateways into full administration

For a Minimal Asset Process there is no alternative at all. How a Minimal Asset Process works and how you apply for one both start from that condition.

The certificate in one place

An authorised person, under section 9. In practice that is an approved money adviser, and regulation 4 of the 2016 Regulations sets the classes rather than leaving them to practice.

Free advisers are inside those categories

Regulation 4 names a citizens advice bureau in full membership of Citizens Advice Scotland and a local authority money advice team among the classes, and both are free. It also covers insolvency practitioners, advisers approved for the Debt Arrangement Scheme, and advisers at organisations accredited at Type 2 or above against the Scottish National Standards.

National Debtline and the other national services will talk the options through with you free as well, and will tell you which category they fall into.

Nobody has to pay a commercial provider to get into sequestration. Ask which category of approved adviser the person you are speaking to falls into if you are not sure.

And it is free by regulation, not by goodwill

Regulation 9 of the Bankruptcy (Scotland) Regulations 2016 says no fee is chargeable for granting a certificate for sequestration.

That is separate from the application fee, which item 22 of the Schedule to the Bankruptcy Fees (Scotland) Regulations 2018, as substituted on 6 February 2023, sets at £150 for full administration and nothing for a Minimal Asset Process. Whether the £150 can be waived sets out the exemptions.

What the adviser is deciding

Section 9 turns on inability to pay your debts as they become due, which is a judgement about your figures rather than about your intentions.

That is why the appointment comes first and the certificate last. Whether you need a money adviser covers what the appointment involves.

30 days, under regulation 10, and section 2(10) makes that period one ending immediately before the date the debtor application is made.

The part nobody else states

The certificate has to be live on the day the application goes in. It is not enough that it was granted at some point in the previous month and has since expired.

Section 2(10) defines the prescribed period by reference to the date the application is made, and the power to prescribe it is in section 9(4)(b).

Ask your adviser to write the start and end dates on your copy. That single line removes any doubt about your deadline.

The practical order of work

Thirty days is not long once paperwork is being gathered. Bank statements, benefit award letters, a full creditor list and details of anything you own all have to be in place.

So the sensible sequence is evidence first and certificate last. A certificate obtained at the first appointment often expires before the application is ready.

If the 30 days runs out

That is not the end of the road. You can go back to an approved adviser and be assessed again on your current figures.

Tell the adviser about any change inside the period as well. A new job, a lump sum or a change in benefits can all move you between routes, and how you apply sets out what each route needs.

The certificate route closes, and an adviser who declines is usually telling you something useful about your figures.

Apparent insolvency may already exist

Section 16(1) lists the events that constitute apparent insolvency, and a charge for payment that has expired without payment is the common one.

What a charge for payment is explains the document, and whether a creditor can make you bankrupt covers what a creditor can do with the same event.

Some limbs of section 16(1) carry a proviso in section 16(2). Ask your adviser whether it is in play on your facts.

The certificate against apparent insolvency

Why an adviser might decline

Usually because the figures show the debts could be cleared over a period you could sustain. That is information rather than a refusal of help.

It can also mean a different route fits better on your assets. A homeowner, for example, is outside the Minimal Asset Process altogether.

And there may be a better route entirely

If the figures show you could clear the debts over a period, that points to the Debt Arrangement Scheme rather than to insolvency, and bankruptcy against the scheme compares them.

A protected trust deed is the other formal option, and a trust deed against sequestration sets out where the answer turns.

It does not award sequestration, it does not choose your route, and it does not stop anything happening to you in the meantime.

It is not a decision on your application

The Accountant in Bankruptcy still has to be satisfied that every statutory condition is met. mygov.scot sets out the application process itself.

A certificate is one condition among several. It says nothing about your assets, your debt level or any previous award.

It has no effect on diligence

Holding a certificate does not stop an earnings arrestment or a sheriff officer. Protection comes from a statutory moratorium or from the award itself, and what sequestration does to diligence sets out which is which.

How to apply for a moratorium covers the six months of breathing space that is available while an application is prepared.

It is a listed ground for a bankruptcy restrictions order, and the wording matters. Section 156(2)(c) covers failing to supply accurate information to an authorised person for the purpose of the granting of a certificate.

An omission, not just an act

The ground is failing to supply accurate information rather than supplying inaccurate information. Leaving something out can engage it just as much as putting something wrong in.

That is a real difference in practice. Honest updates to your adviser cost you nothing, and silence can cost you years.

Who decides, and what you get to say

Where the Accountant in Bankruptcy proposes to make an order it must notify you first, and you have a right to make representations. It must take those representations into account.

There is no equivalent in section 155 for an order made by the sheriff on the Accountant in Bankruptcy’s application. That is a difference worth knowing if a letter arrives.

What an order would mean

Section 159(2) gives an order made by the Accountant in Bankruptcy a length of between two and five years, and one made by the sheriff between five and fifteen.

There is no such thing as a bankruptcy restrictions undertaking in Scotland. The 2016 Act provides for orders and interim orders only, and undertakings belong to the law of England and Wales.

The credit restrictions are not automatic. Section 157(1) lets the decision maker specify that they apply, which means some orders carry them and some do not.

Get the free advice first and treat the certificate as the last step rather than the opening move. An approved money adviser has to be involved in any event.

The sequence that works

How you apply for sequestration sets out the paperwork, and how much debt you need covers the thresholds each route requires.

Why the order of the steps matters

The certificate is the only step with a deadline attached to it. Everything before it can take as long as it needs to.

Getting that order right is the difference between one appointment and three. It is also the commonest reason an application slips.

Questions worth asking at the appointment

• Which route the figures point to, and why.
• What the start and end dates on the certificate will be.
• Whether the application fee is payable in your case.
• What would happen to anything you own.

Whether you need a money adviser explains why the appointment is compulsory rather than optional.