Most people applying are thinking about credit cards, an overdraft, a catalogue account and council tax arrears. Those are ordinary debts, and discharge deals with all of them.

The trouble starts when someone assumes every letter in the drawer is covered. A justice of the peace court fine is not, and neither is the mortgage secured over the house.

What follows is each exception, where it comes from, and the two places the Act narrows an exception again. How sequestration works covers the process around it.

It releases you from everything 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.

The date of sequestration is the anchor

Everything turns on what you owed on that date. A liability you take on the day afterwards is outside the discharge entirely, however similar it looks.

Section 22(7) fixes it. On a debtor application that date is the date the award is made, and on a creditor petition it is earlier, when the sheriff granted warrant.

What is included, on the charities’ own lists

Citizens Advice Scotland and National Debtline both list credit and store cards, personal loans, catalogue debt, overdrafts, council tax arrears and utility arrears among the debts a sequestration covers.

Discharge is not the same as the sequestration ending

Your discharge deals with your liability for the debts. The trustee carries on dealing with the estate afterwards, and that is a separate event with its own timetable.

So a debt being written off does not mean the case is closed. How long a sequestration lasts covers the difference between the two clocks.

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.

The list, limb by limb

Note that the Crown limb and the justice of the peace court limb are separate. A page that mentions only Crown fines has missed the one most readers are holding.

What the fraud limb actually turns on

Paragraph (e) asks how the liability was incurred, not who the creditor is. A debt to an ordinary lender can fall inside it and a debt to a public body can fall outside it.

That distinction is worth taking seriously with an overpayment. An overpayment caused by an official error or an honest mistake is a different thing from one obtained by fraud.

Keep paying, or speak to the court

Sequestration does not pause a fine and does not vary an instalment arrangement. If you cannot meet one, that is a conversation with the court rather than with your trustee.

Enforcement of a surviving debt is not blocked in the way it is for ordinary debts either. What sequestration does to sheriff officers and other diligence sets out which enforcement stops and which does not.

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.

Why the route matters and not just the answer

Section 145(7) of the 2016 Act provides that nothing in the section affects the regulations to which section 73B of the Education (Scotland) Act 1980 applies.

So a student loan is not an exception written into the discharge. The discharge simply leaves the student loan regulations standing, and repayment carries on under them.

One commercial page in this market writes off student loans in its body text and excludes them in its own frequently asked questions. Getting the mechanism right is how you avoid that.

The asymmetry nobody points out

A student loan is left out of the £25,000 test on the way in and is still owed on the way out.

Section 2(2A) has left student loan debt out of the £25,000 Minimal Asset Process calculation since 29 March 2021, and section 145(7) keeps it payable afterwards. Whether a MAP writes off all your debts covers the same point from the other end.

The ongoing obligation survives and two specific things are taken back out of it. This is the part most guidance states in half.

The exception, in the Act’s own terms

Section 145(3)(f) covers aliment, or any sum of an alimentary nature, under any enactment or rule of law. It also covers a periodical allowance payable on divorce, by court order or under an obligation.

Those words are narrower than the usual paraphrase. It is a periodical allowance on divorce rather than any periodical payment, and the aliment limb reaches a rule of law as well as an enactment.

The two carve-outs in section 145(4)

Historic child support arrears and the continuing duty to pay are handled differently, and that split catches people out. Ask your money adviser to separate them before you apply.

It clears your personal obligation and leaves the security intact. Those are two different things and only one of them is discharged.

What section 145(5) says

Discharge does not affect a secured creditor’s right to enforce the security for an obligation you have been discharged from. The lender keeps its rights over the property.

So the payments still matter and the house is still at risk if they stop. Whether you lose your home in a sequestration deals with the trustee’s position on heritable property.

A shortfall is a different question again

Where a secured lender sells and the proceeds fall short, the shortfall is an ordinary debt rather than a secured one. Whether it is caught by your discharge depends on when you became liable for it.

That is a question to put to your money adviser with the paperwork in front of them. It turns on the dates rather than on the label the lender uses.

Debts you take on after the award

Rent, council tax, gas, electricity and phone charges for the period after the award are current bills. They are payable in full and no discharge reaches them.

That is why the contribution assessment leaves you able to meet ongoing costs. Falling behind on new liabilities creates a problem the sequestration cannot solve.

Your duty to co-operate with the trustee, and any contribution order that has been made. Neither is written off, because neither is a debt you owed to a creditor.

The duty to co-operate

Section 145(3)(g) preserves the obligation imposed by section 215, which requires you to take every practicable step needed to let the trustee perform the functions the Act gives the trustee.

Section 215(6) says in terms that the word debtor there includes a debtor who has been discharged. So the duty is designed to outlive your discharge.

In practice that means answering the trustee, signing what needs signing and telling the trustee about changes. It is the obligation people forget once the debts have gone.

The contribution order

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 discharge frees you from the debts and does not switch off the payments. How a debtor contribution order is calculated covers how the figure is arrived at.

Something can survive your discharge in four different ways, and only one of them is the section 145(3) list. Keeping them apart is what makes the answer usable.

The four routes side by side

A Minimal Asset Process adds a fifth thing for six months

Where discharge comes under section 140, section 146 applies for the six months beginning with the date of discharge, and it is a disclosure duty rather than a debt.

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.

Check your own paperwork against the list

Read the letters in the drawer against the seven limbs before you apply, because the exceptions are narrow but specific. Whether discharge ends everything at twelve months covers what else carries on, and how to apply sets out the steps.