Welcome to the Debt Advice for Scottish Residents Information Centre

Bankruptcy (Sequestration)

Bankruptcy is a formal method of dealing with debts if other options have failed or are inappropriate. The consequences of bankruptcy are severe and no one should make an application for bankruptcy without seeking advice.

Bankruptcy starts when someone in debt (a debtor) is declared bankrupt by the sheriff or the Accountant in Bankruptcy. If a debtor is declared bankrupt, it means that they have to hand over their estate including their home, to their trustee. The person who administers a bankruptcy is called the trustee. They can be either the Accountant in Bankruptcy or an insolvency practitioner. A debtor will be able to keep some things that are essential for everyday living, however they may be required to make some payment from their income. It is the duty of the trustee to sell the debtors assets or property and to use the money to: pay the costs of managing the bankruptcy; and pay creditors as much as possible of what the debtor owes them.

The creditors are the people or organisations that are owed money by the debtor. Subject to certain conditions, a creditor can apply to a sheriff to make a debtor bankrupt or a debtor can apply to Accountant in Bankruptcy to make themselves bankrupt. In Scotland bankruptcy is sometimes called sequestration.

Bankruptcy Fees

The Creditor Petition Fee was introduced in Part II, Regulation 6.2 of The Bankruptcy Fees (Scotland) Amendment Regulations 2009, which came into force on 1 April 2009 and amended as of 1 April 2010.

Who does the Fee apply to?

With effect from 1 April 2010, any person who lodges in a Scottish Court a petition for the bankruptcy of an individual, must pay to the Accountant in Bankruptcy a fee of £200, per petition lodged. The fee will be payable on all petitions received by the Accountant in Bankruptcy on, or after, 1 April 2010.

What the new fee is for?

This fee is payable to cover the Accountant in Bankruptcy's administration costs for processing and recording the petitions and for undertaking checks to prevent duplication of petitions and applications for bankruptcy. The fee is payable regardless if the petition for bankruptcy is later withdrawn, or an award of bankruptcy is not granted.

How do I pay?

Creditors must send a copy of their petition for bankruptcy to the Accountant in Bankruptcy on the day they lodge their petition in the Scottish Court. On receipt of the copy of the petition, the Accountant in Bankruptcy will issue an invoice to the petitioning creditor, for the £200 fee.

There is no provision for this fee to be waived nor paid by instalment. The fee must be paid, in full, following receipt of the invoice.

If there are more than one creditor named on the petition, the invoice will be issued to the first named creditor. However, the fee is jointly and severally payable by all the named creditors on the petition

When do I pay?

You must make payment within 30 days of receipt of the invoice.

If your organisation regularly petitions for the bankruptcy of your debtors, you may ask the Accountant in Bankruptcy to invoice you on a monthly basis for the total fees due for all the bankruptcies you have petitioned for in the previous month. If you wish to receive an invoice on a monthly basis, you must contact our Finance Department detailing the name of your organisation, the average number of petitions you expect to lodge per month and details of the bank account from which the fees will be paid.

AiB Finance Department
1 Pennyburn Road
Kilwinning
KA13 6SA

If you wish more information regarding the process for applying for someone to become bankrupt, please read the AiB's Creditor's Guide or contact their Helpline on: 0845 762 6171

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