Government Debt Help – Bankruptcy, Sequestration, Trust Deeds and Minimal Assets Process
Searching for Government debt help? Like one of the many indebted Brits out there, you may have hoped that the Government provides some form of free debt solution. Unfortunately, there’s no such thing. However, there are multiple forms of government debt help solutions that are regulated by government bodies. In our first guide – Government Debt Advice – Four Debt Solutions You Should Know About – we explored Debt Management Plans, Administration Orders, Individual Voluntary Arrangement and Debt Relief Orders; in this blog, the second in our two-part series – we dig into the details of four more: Bankruptcy, Sequestration, Trust Deeds and Minimal Assets Process.
Government debt help schemes – Bankruptcy
Overview: Possibly the most well-known form of government debt help, Bankruptcy is a serious debt solution with far-reaching consequences. Briefly, bankruptcy allows you to write off the majority of your debts, with the Bankruptcy recorded on your credit history for six years.
Bankruptcy isn’t available in Scotland. In this region, it is called Sequestration and has different fees and legal processes.
Cost: Somewhat perversely, filing for bankruptcy isn’t cheap. The fee comes a total of £680, which comprises of an adjudicator fee of £130 and a deposit of £550.
Eligibility: In order to be eligible for bankruptcy, you must:
- Owe a minimum of £5,000
- Be unable to repay your debts over a reasonable timeframe
Government debt help schemes – Sequestration
Overview: Sequestration is the Scottish version of bankruptcy. Like personal bankruptcy in England, this form of government debt help is a type of insolvency suited to people who are unable to repay their debts within a reasonable period of time.
Cost: The total court fee for sequestration is £200 per person.
Eligibility: To be eligible for sequestration, you must be shown to be insolvent, and meet strict qualifying criteria. You must:
- Not have been declared bankruptcy within the last five years
- Live in Scotland or have lived there at some point in the past 12 months
- Have debts that total to £3,000 or more
Government debt help schemes – Trust Deeds
Overview: A Trust Deed is a formal, legally binding agreement that is made between you and your creditors. It is the Scottish version of an Individual Voluntary Arrangement. As a form of government debt help, this debt solution runs for a period of four years, over which time you’d make affordable repayments to your creditors. Following this time any remaining debts would be written off.
Cost: The fee for a Trust Deed is different from case to case, however, the amount paid to the Trustee that manages your arrangement should always be clearly communicated to you in advance.
Eligibility: To qualify for a Trust Deed there are various criteria that you must fulfil:
- You must owe a minimum of £5,000 in unsecured debt
- You must be unable to repay what you owe within a reasonable period of time
Government debt help schemes – Minimal Assets Process
Overview: Formerly known as LILA, a Minimal Assets Process (MAP) allows you to write off debts that you’re unable to repay within a reasonable time period. MAPs are designed for those who have a low income and don’t own many assets (e.g. you’re not a homeowner).
Cost: £90 as an application fee
Eligibility: To qualify for a MAP you must:
- Owe between £1,599 – £17,000
- Be on a low income
National Debt Help is here to help you in taking the first step to getting out of debt. Talk with our team today about whether an IVA could be right for your financial circumstances. Call on 0800 002 9051 or send us a message via our contact page.