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Sequestration

The circumstances in which we can proceed to Sequestrate a Debtor are:

  • Where a Statutory Demand, in it's statutory prescribed form, has been served by Sheriff Officer on the Debtor at least 21 days before. It is imperative that no response has been given by the Debtor to that Demand (and this too must be in the statutory prescribed form). If a response, denying the debt, is received then a Sequestration Petition is not possible.
  • Where the 14 day notice period has expired after a Charge for Payment (on the back of either Decree or English registered judgment) was served on the Debtor by Sheriff Officer, and the debt remains outstanding.

There are some requirements that must be met before the Petition can be presented to the court:

  • The debt owed must be a minimum of £3000
  • the Statutory Demand or Charge must have been served within 4 months of the date of presentation; and
  • a minimum of 12 weeks previously the Debtor was provided with a DAIP - Debt Advice and Information Package (http://bit.ly/y7Rdnh)

If all these conditions are met, and it has been ascertained that the Debtor is more than likely to have assets that can be sold to pay off creditors, then we can start the Sequestration Procedure.

What generally happens in Sequestration Procedure?

When we are instructed to initiate these proceedings we immediately seek Consent from an Insolvency Practitioner (IP). We can suggest such a practitioner, as we have a number of trusted business partners we can recommend, or if you have a preference of your own we are delighted to work with your own IP during the whole process. We will always seek to have the IP involved on a speculative basis, but in some rare situations if no IP is willing to work on this basis, then we would suggest we ask the court to appoint the Accountant in Bankruptcy instead.

We will prepare the Petition and all necessary documentation to be lodged with it, and present it all to the relevant Court that has jurisdiction.

The Court will then usually grant Warrant to cite the Debtor and fix a Court Hearing when the Petition will be heard.

We will then arrange for Sheriff Officers to serve the Petition on the Debtor between a maximum of 14 day and a minimum of 6 days before the Hearing.

If the Debtor does not wish to be Sequestrated then they will have to pay the Debt in full (which includes all interest and expenses incurred). If that happens we will arrange for the Petition to be withdrawn at the Hearing.   It should be noted that the Sequestration Hearing can only be continued a maximum of 42 days and only in certain circumstances. Such continuation is at the Sheriff’s discretion and a Debtor should not consider it would automatically be granted.

If the Debtor fails to pay the Debt in full, then we will proceed with the appointment of a Trustee, thus having the Debtor Sequestrated.

If, after initial discussions and investigations by the IP, they do not wish to be appointed the ultimate Trustee in Sequestration then we can change the Petition to have The Accountant in Bankruptcy appointed (at no extra cost).

That means that the Debtor will have to hand over their estate, which can include their home, to the appointed Trustee in Sequestration. Such 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. The Trustee in Sequestration has a duty to ingather, and sell where appropriate, the Debtors assets or property. The money recovered is then used to pay for the cost of administering the Sequestration and then pay as much as possible to all Creditors.

What does this all cost?

While we always try to recover the costs the Petitioning Creditor has incurred in full from the Debtor, and this will be required for the Petition to be withdrawn, in some cases unfortunately the Petitioning Creditor will have to meet the cost of the Sequestration Petition. These are the costs up to the point the Trustee in Sequestration is appointed. They usually consist of

Our Petition Fee (which is extremely competitive) plus VAT

  • The court dues payable to lodge the Petition
  • Sheriff Officers Fees for serving Petition
  • Accountant in Bankruptcy Fee (required in all Sequestration cases, regardless of whether an IP or the AIB are to be appointed)
  • Court attendance fees

We are happy to quote these costs prior to starting the Sequestration process.