Check the steps you should follow to apply for bankruptcy in Scotland.
Get temporary relief from creditors (moratorium)
If you're thinking about bankruptcy or any other debt solution you may able to apply for a moratorium.
It's temporary relief from your creditors which stops them taking further action against you for 6 months. For example:
- arresting your wages
- taking any possessions
- starting any new court action
You should check with a money adviser if a moratorium is right for you. You can apply yourself or through a money adviser.
If you need other support
Organisations who can offer support with debt.
Mental health and money
Check who can apply
There are 2 types of bankruptcy.
Which type you can apply for depends on your circumstances. The main things are how much you owe and whether you’ve assets or disposable income.
'Assets' are the things you own over the value of £1,000. For example, property, cars and jewellery.
'Disposable income' is any money you've left over after essential living costs. For example, rent or mortgage, food and utility bills.
A money adviser will discuss any 'assets' or 'disposable income' you have when you apply.
1. Minimal Asset Process (MAP)
- few assets and no disposable income
- owe less than £25,000
2. Full Administration
- do not qualify for MAP (usually because you do have assets or disposable income)
- owe at least £3,000
An approved money adviser needs to do a financial assessment to check if you qualify.
Check how bankruptcy can affect you
Bankruptcy can affect things like your:
- assets and income
- bank account
- credit rating
You should read:
Get free debt advice
You need to apply for bankruptcy through an approved money adviser. You cannot apply yourself.
The Scottish Government help to fund organisations to give free professional debt advice.
You can also get advice from an insolvency practitioner (IP).
IPs may charge for their service. You should check this when you contact them.
There are other debt solutions available. You need to get advice first to check the right solution for you.
Making the application
You need to apply through an approved money adviser (or IP). They'll do a financial assessment and ask about things like your:
- assets (if you have any)
You should have this information ready when you apply.
They’ll check if you qualify for bankruptcy and give you advice on the best solution for you.
They'll send an online application to a part of the Scottish Government called Accountant in Bankruptcy (AiB).
It costs £150 to apply. Some people do not need to pay a fee. The adviser will tell you if you need to pay when you apply.
AiB decides if you can go bankrupt.
Check how your bank account may be affected
Your bank may freeze your account when AiB approves your bankruptcy application.
If this happens you may not be able to withdraw money for a while. So you should withdraw enough money to cover your living costs.
Depending on their rules, your bank may close your account. If this happens you'll need to open a new account with another bank. You should contact your bank for more information.
Check what to do if you need urgent help with food or money.
Getting a bankruptcy decision
You usually get a decision within 8 working days.
This is as long as AiB have all the information they need. They'll contact you if they need more information.
After you go bankrupt
When bankruptcy ends
You're usually 'discharged' from bankruptcy and its rules after one year.
But the full bankruptcy process can last 4 years or longer. If you need to make payments, you usually need to do this for 4 years.
You're bankrupt for 6 months if you go through the Minimal Asset Process (MAP).
There is a problem
Thanks for your feedback