Best Bankruptcy & Debt Lawyers in Aberdeen

About Bankruptcy & Debt Law in Aberdeen, United Kingdom

In Scotland, including Aberdeen, personal bankruptcy is called sequestration. It sits alongside two other main statutory options for dealing with unaffordable debt, the Debt Arrangement Scheme, known as DAS, and protected trust deeds. These are underpinned by Scottish legislation and are administered or supervised by the Accountant in Bankruptcy, the Scottish Government agency that oversees personal insolvency and the Debt Arrangement Scheme.

Sequestration is a formal insolvency process for individuals who cannot pay their debts as they fall due. A trustee is appointed to sell non-essential assets and collect affordable contributions for a defined period to repay creditors. Protected trust deeds are voluntary agreements with a licensed insolvency practitioner acting as trustee. When they become protected, creditors are bound by the terms and interest is written off at the end if you comply. The Debt Arrangement Scheme is a statutory debt repayment plan that lets you pay what you can afford each month, with interest and charges frozen, and offers legal protection from enforcement while you keep your assets.

For businesses in Aberdeen, including sole traders and limited companies, different frameworks may apply. Sole traders can usually access the same personal options as individuals. Companies follow UK-wide corporate insolvency rules such as administration, liquidation and company voluntary arrangements, but Scottish court procedure and enforcement law apply to assets and creditors located in Scotland.

Aberdeen residents often interact with the Aberdeen Sheriff Court for local court matters, and many cases and applications are handled administratively by the Accountant in Bankruptcy. Local free advice is available through Aberdeen City Council services and third-sector agencies, and many private solicitors and licensed insolvency practitioners operate in the city and surrounding area.

This guide provides general information only. It is not legal advice. You should speak to a qualified adviser about your specific circumstances.

Why You May Need a Lawyer

You may need a lawyer if a creditor has raised court action, if you have received a charge for payment or enforcement has started, or if you want to ask the court for time to pay. Scottish diligence, which is the collective term for creditor enforcement, can move quickly once a court decree or summary warrant exists, so early legal advice can protect wages, bank funds and essential goods.

A lawyer can help you assess whether sequestration, a protected trust deed or the Debt Arrangement Scheme is suitable, explain the consequences for your home, car and business, and guide you through the tests for eligibility and affordability. They can also challenge unfair charges, dispute liability, negotiate settlements, and ensure you comply with duties once a process begins.

If you run a business, specialist advice is valuable where there are personal guarantees, tax debts, employees or lease obligations. A solicitor can coordinate with a licensed insolvency practitioner, consider rescue options, and manage director duties and potential personal risk.

Where mental health, vulnerability, coercion or language barriers exist, a lawyer or approved money adviser can make sure you receive appropriate forbearance and that creditors meet their pre-action requirements. If you qualify for legal aid, a solicitor can help you apply.

Local Laws Overview

Scottish bankruptcy and debt relief are governed primarily by the Bankruptcy Scotland Act 2016, associated regulations for the Debt Arrangement Scheme and Trust Deed regulations, and rules of diligence under the Debtors Scotland Act 1987 and other statutes. The Accountant in Bankruptcy is the supervisory body for sequestration and DAS. Many applications, including debtor applications for sequestration and DAS debt payment programmes, are made directly to the Accountant in Bankruptcy rather than the court.

Key personal options include sequestration, protected trust deeds, the Debt Arrangement Scheme, and the Minimal Asset Process, often abbreviated to MAP, which is a streamlined form of sequestration for people with low income and low assets. Each option has eligibility rules, costs, and distinct effects on assets, income contributions and credit files.

Sequestration typically results in discharge after a fixed period if you cooperate, although income contributions can continue for longer. A trustee can realise non-essential assets and may have a claim over home equity. Protected trust deeds usually run for a set number of years, with regular contributions and the possibility of asset realisations by the trustee. DAS lets you repay debts in full over time from disposable income while freezing interest and charges and stopping most enforcement.

Before a creditor can enforce a debt in Scotland, they normally need a decree, which is a court judgment, or a summary warrant for certain public debts. After that, they usually serve a charge for payment and may then use diligence. Common diligence types include bank arrestment, earnings arrestment, attachment of non-essential goods and inhibition over heritable property such as houses and land. There are protections for essential items and for goods in a dwelling, and courts can grant time to pay directions and orders to allow affordable repayment and to stop diligence if payments are maintained.

Scottish law provides for a short statutory moratorium period that gives temporary protection from creditor enforcement while you seek debt advice and apply for a statutory solution. The duration and rules are set by regulations and can change, so take advice before relying on it.

For companies registered in Scotland, corporate insolvency is governed chiefly by the Insolvency Act 1986 and associated rules, with Scottish procedural differences in court processes and enforcement. Aberdeen Sheriff Court deals with many civil matters, and the Court of Session in Edinburgh handles some complex or higher value cases.

Frequently Asked Questions

What is the difference between bankruptcy and sequestration in Scotland

They are the same for individuals. In Scotland the correct legal term is sequestration. It is a formal insolvency process administered by the Accountant in Bankruptcy or a private trustee. People often still say bankruptcy in everyday conversation.

How does the Debt Arrangement Scheme work

DAS is a statutory debt repayment plan. An approved money adviser helps you propose an affordable monthly payment based on your household budget. If approved, interest and charges are frozen, you get protection from most enforcement, and you repay your debts in full over time. You keep your assets because DAS is not an insolvency. If your circumstances change, the plan can be varied or, if necessary, revoked.

What is a protected trust deed

A trust deed is a voluntary agreement with a licensed insolvency practitioner, called the trustee. If enough creditors do not object within the set period, it becomes protected, which binds all creditors and stops further enforcement. You make affordable contributions for a typical fixed term and may need to surrender non-essential assets. On successful completion, remaining unsecured debt in the trust deed is written off.

Will I lose my home if I go into sequestration

It depends on your circumstances. The trustee must consider your equity, mortgage, dependants and alternatives. Options can include a third party buying out the trustee's interest, payment plans, or in some cases sale. There are protections and time limits for dealing with a family home. Get advice early if you have equity or mortgage arrears.

Can I keep my car

Essential household goods are protected, but vehicles are treated case by case. If a car is of modest value and reasonably required for work, care or disability, you may keep it. Higher value vehicles may need to be sold or replaced with a lower value alternative. In DAS you normally keep your car because assets are not surrendered.

How long does sequestration last

Most people are discharged after a defined period if they cooperate. Income contributions can continue for a longer fixed period if you have surplus income. Your credit file will usually show the insolvency for six years from the date it began. Exact durations depend on the route used, such as standard sequestration or the Minimal Asset Process.

What happens to joint debts

Most joint debts are joint and several in Scotland. That means each borrower can be held liable for the full balance. If one person enters a debt solution, the creditor can still pursue the other. You and any co-borrower should seek coordinated advice before taking action.

Can creditors take money from my wages or bank without warning

Once a creditor has a decree or other authority, they usually must serve a charge for payment and follow legal steps. After that they may use earnings arrestment or bank arrestment, subject to protected minimum amounts. A DAS approval or a time to pay order can stop or suspend most diligence. If money has already been arrested, urgent advice is essential.

Will my employer or landlord be told

Your employer is not routinely told about your debt solution. They will be contacted only if an earnings arrestment is used or your role requires disclosure under regulatory or contractual terms. Landlords are not routinely notified, but arrears and affordability can affect tenancies. Always check employment and tenancy agreements and seek advice before applying.

Can I get help with fees or legal costs

There are application fees for some processes, but fee reductions or exemptions may be available depending on income or benefits. Legal aid may cover advice and representation for some court matters if you are eligible, assessed by the Scottish Legal Aid Board. Free money advice is also available from local services in Aberdeen and national charities.

Additional Resources

Accountant in Bankruptcy, the Scottish Government agency responsible for administering sequestration and supervising DAS and trust deeds.

Aberdeen Sheriff Court and Justice of the Peace Court for local civil debt and diligence matters.

Aberdeen City Council Money Advice and Welfare Rights services for free local debt advice and budgeting support.

Citizens Advice Scotland and Aberdeen Citizens Advice Bureau for free, confidential guidance on debt and benefits.

StepChange Debt Charity for telephone and online debt advice and DAS applications through approved advisers.

National Debtline for freephone debt advice tailored to Scottish law.

MoneyHelper, the UK-wide public guidance service for budgeting tools and debt information.

Law Society of Scotland for finding a regulated Scottish solicitor experienced in debt, diligence and insolvency.

Insolvency Practitioners licensed in Scotland, who act as trustees in sequestration and trust deeds and can advise on corporate insolvency.

Scottish Legal Aid Board for information on eligibility and how to apply for legal aid.

Next Steps

Gather key information about your situation. Make a simple list of all debts, balances, reference numbers and creditor names. Note your income, essential household spending, assets, and any court papers, defaults, or enforcement notices such as a charge for payment or arrestment.

Speak to a free, approved money adviser in Aberdeen or a national service. Ask for a full options review covering sequestration, the Minimal Asset Process, protected trust deeds, the Debt Arrangement Scheme, and informal repayment or settlement. Request a written action plan.

If court action or diligence is threatened or underway, contact a solicitor immediately to consider urgent protections, such as time to pay applications or a statutory moratorium while you apply for a formal solution.

Check whether you qualify for legal aid and whether any application fees can be reduced or waived. Ask advisers to help you complete forms accurately and submit supporting documents on time.

If you own a home or run a business, seek specialist advice before choosing an option that could affect property, leases, employees or tax. Ask about alternatives such as DAS or negotiated settlements if you have assets to protect.

Prepare for your appointments. Bring identification, wage slips or benefit letters, bank statements, tenancy or mortgage documents, vehicle finance agreements, and any correspondence from creditors or the court.

Choose regulated professionals. Look for a solicitor regulated by the Law Society of Scotland and, if applicable, an insolvency practitioner licensed to operate in Scotland. Make sure any money adviser is approved to submit DAS applications.

Act early. The sooner you get advice, the more choices you have and the more likely you are to protect wages, bank funds and essential assets.

Review your budget and set up realistic payments. Whether you proceed with DAS, a trust deed or sequestration, keeping to agreed contributions and reporting changes in circumstances is essential for a successful outcome.

Keep copies of everything and maintain open communication with your adviser, trustee or solicitor. If your situation changes, tell them promptly so they can adjust your plan or seek further orders from the court if needed.