What is a creditor petitions for sequestration

CPAG

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Debt Advice Handbook Scotland 1st ed - with new material

What is a creditor petitions for sequestration

An individual creditor or a group of creditors owed £5,000 or more can petition the sheriff court for a client’s bankruptcy.1s7 B(S)A 2016 The application must be through the court, not the Account in Bankruptcy (AiB).

All creditor petitions go down the Full Administration Bankruptcy (FAB) route.

1 s7 B(S)A 2016 »

Debt Advice and Information Package

At least 14 days (and not more than 12 weeks) before the creditor petitions the court, they must serve the client with a Debt Advice and Information Package.1s3 B(S)A 2016

A copy of the document can be found at .

1 s3 B(S)A 2016 »

Apparent insolvency

‘Apparent insolvency’ for a creditor’s petition is generally constituted by an expired charge for payment or expired statutory demand.

A charge for payment expires 14 days after it is served and a statutory demand expires 21 days after service. The creditor must then use this evidence of apparent insolvency to lodge a petition in court within four months of the date of presentation of the petition.

A revoked Debt Payment Programme (DPP) under the Debt Arrangement Scheme (DAS) can also constitute apparent insolvency.1s16 B(S)A 2016

1 s16 B(S)A 2016 »

Charge for payment

A charge for payment is issued to the client after decree (or equivalent) has been issued. It gives the client 14 days to make payment. On the 15th day after service, the creditor can begin diligence against the client, including making an application to the court for the client’s bankruptcy.

Full Administration Bankruptcy procedure

All creditor petitions are administered under the Full Administration Bankruptcy (FAB) procedure.

See the section on FAB starting on here for more information on individual issues and procedures.

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Debt Advice Handbook Scotland - 1st edition

Written in partnership with Citizens Advice Scotland and Money Advice Scotland, CPAG is delighted to announce the first edition of the Debt Advice Handbook Scotland. Based on CPAG’s best-selling Debt Advice Handbook, it details the stages of the debt advice process in Scotland and the key skills needed to give good advice. No money adviser should be without this essential guide. This online edition is funded by the Scottish government.

The Handbook provides the most comprehensive information needed by advisers on the tools and strategies to help clients with their financial difficulties. It details the key stages of money advice, including interviewing clients, establishing liability, prioritising debts, preparing a financial statement, negotiating with creditors and dealing with sheriff officers. Emphasis is placed on taking due care of vulnerable clients and making sure that any payment arrangements agreed are appropriate. There is a focus on sustainable credit arrangements that do not affect a client’s ability to pay essential living expenses and priority debts.

It is the go-to tool for specialist debt advisers as a first step in accessing primary legislation and regulations and is also a reliable guide and training aid for the new debt adviser. Advisers who undertake debt advice alongside other sorts of advice work or other professional disciplines – such as social workers and housing officers – will find this handbook an indispensable resource.

Fully indexed and cross-referenced to law, official guidance and to court and tribunal decisions, tactical guidance and examples are included throughout.

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CPAG

Print publication date Jun, 2024

This content was last updated:2024-07-01

Word count175,160

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