The decision for sequestration isn’t as easy as many financial decisions. For example, when faced with the choice between saving money on a product or service, who doesn’t want to save a few pounds now and then? But when it comes to Sequestration an assortment of emotions make it a difficult choice to take even when it’s obvious that there are very few other suitable options.
Sequestration is one of the hardest choices you’ll make in your life and one complicated by other’s opinion about it. Some people have a very strong reaction against the idea of being sequestered and when faced with the possibility, will very likely look for other options. The most obvious one is a Trust Deed. Trust Deeds Scotland have many similarities to Sequestration but many crucial differences too, and it’s those differences that under the wrong circumstances can make your situation much worse over time. You may end up putting yourself through a lot more pain and suffering to achieve the same purpose at the end – to be debt-free and move on with your life
An application for Sequestration can be completed and approved in weeks, while the valuation and sale of your assets can take a few months to complete. Trust Deeds on the other hand last 36 months and require you to stick to a strict budget, something that you may find very difficult to do after a long time using credit.
Sequestration has a set fee of £100 if you apply yourself. Trust Deeds on the other hand require you to pay a fee every month for 36 months to an Insolvency Practitioner for day-to-day administration, which can up add up to a lot of money over its full term.
To qualify for a Trust Deed you need to have debt of around £8,000 otherwise you cannot apply. Sequestration on the other hand can be applied for with as little as £1,500 debt, making it much more affordable for those people who know they don’t have any way of paying back their debts but are unhappy simply waiting for the balances to rise with fees and interest until they can.
Once your payment for your application (petition) for sequestration has been accepted, there is no more money expected from you bar the fees of the IP and these come from the sale of your assets before it goes to your creditors. The only exception to this is if you earn a lot of money, and will have a considerable amount of disposal income once the sequestration is approved – your IP may ask you to make a monthly contribution for short period of time. Trust Deeds on the other require a payment every month come rain or shine, when your living expenses go up and your wages come down. You can sometimes have your budget adjusted, but you have to apply to your IP for them to review your finances and abide by their decision.
With Trust Deeds you’ll wait three years before you can start a new life for yourself. Sequestration on the other hand will let you start to live again straight away. Once your discharge is granted after 12 months you can start to slowly rebuild your life and your credit record.
Sequestration is not an easy option and certainly not an option for everyone, but for people with a lot of debt and too little income to repay it, sequestration can be a lifesaver. Some people struggle for years to pay back their debts on very little money, only to have something happen and end up being deeper in debt than when they started or having to be sequestered anyway.
Sequestration is a way out of a perpetual debt cycle that is relatively quick, inexpensive and gives almost immediate relief from the stress of dealing with aggressive and unpleasant creditors.