What Is A Certificate For Sequestration In Scotland?
It is a document granted under section 9 of the Bankruptcy (Scotland) Act 2016 certifying that you are unable to pay your debts as they become due. It lets you apply for your own sequestration without waiting for a creditor to act first.
It sounds like something a court issues. It is not, and no sheriff is involved in granting one.
- Part of your pay is protected by law
- The deduction is set by statutory tables, not the creditor
- An arrestment can be stopped or replaced
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Told you need a certificate for sequestration? Get free advice on getting one.
Free, confidential and no obligation.The Act calls the person who grants it an authorised person, and in practice that means an approved money adviser. Regulation 9 says no fee is chargeable for granting one.
It also has a short life. Regulation 10 prescribes 30 days, and section 2(10) says that period ends immediately before the date the application is made.
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What does a certificate for sequestration do?
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
| The gateway | What it requires | Who controls it | The provision |
|---|---|---|---|
| A certificate for sequestration | An authorised person certifies that you cannot pay your debts as they become due | You, by asking | Section 2(8)(e)(ii) |
| Apparent insolvency | A listed event, most often a charge for payment expiring unpaid | Usually a creditor | Section 2(8)(e)(i) |
| A trust deed that failed | You granted a deed and creditors objected or did not agree, so it was not protected | Your creditors | Section 2(8)(e)(iii) |
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
| The question | The answer | Where it comes from |
|---|---|---|
| What it says | That you are unable to pay your debts as they become due | Section 9 |
| Who grants it | An authorised person, which in practice means an approved money adviser | Section 9 |
| What it costs | Nothing. No fee is chargeable for granting one | Regulation 9 of the Bankruptcy (Scotland) Regulations 2016 |
| How long it lasts | 30 days | Regulation 10 |
| When that period ends | Immediately before the date the debtor application is made | Section 2(10) |
| Where it is compulsory | Every Minimal Asset Process application | Section 2(2)(f) |
| Where it is optional | Full administration, as one of three gateways | Section 2(8)(e) |
Who can grant a certificate for sequestration?
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.
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Free, confidential and no obligation.How long does a certificate last?
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.
What happens if you cannot get one?
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
| The question | A certificate for sequestration | Apparent insolvency |
|---|---|---|
| Who controls it | You | A creditor, in most cases |
| What has to happen first | An appointment with an approved adviser | An enforcement step, such as a charge for payment |
| How long it is good for | 30 days | Four months, for a creditor's own petition |
| Does it cost anything | No fee is chargeable | Not applicable |
| Does it stop diligence | No | No |
| Which routes it opens | Both the Minimal Asset Process and full administration | Full administration |
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.
What does the certificate not do?
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.
What happens if the information behind it is wrong?
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.
What should you do before you ask for one?
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
| The stage | What happens | Who does it |
|---|---|---|
| 1. Free money advice | Your whole position is reviewed | You and an approved money adviser |
| 2. The options compared | Minimal Asset Process, full administration, a trust deed and the Debt Arrangement Scheme | You and the adviser |
| 3. Evidence gathered | Income, expenditure, debts and anything you own | You |
| 4. The certificate granted | Inability to pay certified under section 9 | The adviser |
| 5. The application made | Inside the 30 days, and live on the day it goes in | You |
| 6. The decision | Sequestration awarded or refused | The Accountant in Bankruptcy |
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.
Frequently asked questions
Is a certificate for sequestration issued by a court?
No. It is granted by an authorised person under section 9 of the Bankruptcy (Scotland) Act 2016, which in practice means an approved money adviser.
Can a money adviser charge you for one?
No. Regulation 9 of the Bankruptcy (Scotland) Regulations 2016 says no fee is chargeable for granting a certificate for sequestration.
How long does the certificate last?
Regulation 10 prescribes 30 days, and section 2(10) makes that a period ending immediately before the date the debtor application is made, so it has to be live on the day you apply.
Do you always need one?
Always for a Minimal Asset Process, under section 2(2)(f). For full administration it is one of three alternatives in section 2(8)(e), along with apparent insolvency and a failed trust deed.
Does a certificate stop sheriff officers?
No, it has no effect on diligence at all. Protection comes from a statutory moratorium or from the award of sequestration itself.
What if your circumstances change inside the 30 days?
Tell your adviser straight away. Failing to supply accurate information to an authorised person for the purpose of granting a certificate is a listed ground for a bankruptcy restrictions order under section 156(2)(c).
What if the adviser will not grant one?
It usually means the figures show the debts could be cleared over a period, which points towards a repayment route rather than insolvency. Ask what they recommend instead.
Which form is it?
The form is prescribed by regulations that have been amended several times. Ask your money adviser or the Accountant in Bankruptcy to confirm the current one rather than relying on a number you have read elsewhere.
Related guides
- How Do You Apply For Sequestration In Scotland? Which debtor application you qualify for, why a money adviser comes first, what it costs, and what the Accountant in Bankruptcy does next.
- Do You Need A Money Adviser To Apply For Sequestration? Why advice is a legal requirement, who can give it, whether you pay for it, what the appointment covers, and who submits the application.
- 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.
- How Does Minimal Asset Process Bankruptcy Work In Scotland? Who has to apply for you, what the Accountant in Bankruptcy does with the application, and what changes on the day the award is made.
- How Do You Apply For MAP Bankruptcy In Scotland? Why only an approved money adviser can submit the application, what the Accountant in Bankruptcy needs to see, and what it costs.
- Can A Creditor Make You Bankrupt In Scotland? The £5,000 threshold, what apparent insolvency means, the four-month window, how rare creditor petitions are, and what you can do.
- Can You Get The £150 Sequestration Application Fee Waived? The two exemptions from the £150 fee, the no surplus income test, why a Minimal Asset Process is free, and what to do if neither applies.
- How Much Debt Do You Need To Go Bankrupt In Scotland? The £3,000 minimum for a full administration application, what a creditor needs to petition, and why so many pages still print £1,500.
- Which Is Better, A Trust Deed Or Sequestration In Scotland? How the two compare on qualifying, your home and car, cost, length, credit file, and which one stops a wage arrestment sooner.
- Should You Go Bankrupt Or Use The Debt Arrangement Scheme In Scotland? Who each route is for, what happens to your home, which stops a wage arrestment sooner, what you pay, and what each does to your credit file.
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.