Best Bankruptcy Lawyers in Aberdeen

About Bankruptcy Law in Aberdeen, United Kingdom

In Aberdeen, bankruptcy is governed by Scots law and is formally called sequestration. If you live in Scotland or run your main business here, Scottish insolvency law applies. Sequestration is a court-backed legal process that writes off qualifying debts you cannot pay, places your assets and certain income under the control of a trustee, and gives you a route to a fresh start after you meet set duties.

Most debtor applications for sequestration are administered by the Accountant in Bankruptcy, the Scottish Government agency that regulates and oversees personal insolvency. Some cases are dealt with by the Sheriff Court in Aberdeen, especially creditor petitions and certain appeals. Sequestration is one of several debt solutions in Scotland. Others include the Debt Arrangement Scheme, Protected Trust Deeds, and Minimal Asset Process bankruptcy, each with different eligibility rules, costs, and effects.

Scottish bankruptcy law differs in important ways from the rest of the United Kingdom. Timelines, court procedures, debt solutions, contributions from income, and the treatment of the family home are all tailored by Scottish legislation. Getting advice that is specific to Scotland is essential.

Why You May Need a Lawyer

Bankruptcy in Scotland involves legal tests, tight deadlines, and serious consequences for property, income, and business interests. A solicitor with Scottish insolvency experience can help you decide if sequestration is right for you, prepare your application, and protect your position during the process.

You may particularly need a lawyer if a creditor has petitioned for your sequestration, if you own a home or other significant assets, or if you run a business or are a company director. Legal advice is also valuable if you want to challenge a trustee decision, negotiate how your home is treated, dispute the value of assets or the amount of an income contribution, or apply for recall of sequestration after clearing your debts.

Other common situations include defending or pausing creditor enforcement in the Sheriff Court, dealing with complex debts such as tax, benefit overpayments, or guarantees, addressing cross-border issues if you have recently moved, or responding to allegations that could lead to a Bankruptcy Restrictions Order. A lawyer can also coordinate with your money adviser, represent you in Aberdeen Sheriff Court if required, and help you avoid mistakes that could harm your financial recovery.

Local Laws Overview

Scottish bankruptcy is set out mainly in the Bankruptcy Scotland Act 2016 and related regulations. The Accountant in Bankruptcy regulates the system, acting as trustee in many debtor applications and maintaining the public Register of Insolvencies. Aberdeen Sheriff Court handles creditor petitions and certain applications, appeals, and orders connected to sequestration.

Routes into sequestration include a debtor application certified by an approved money adviser and a creditor petition to the Sheriff Court. For a creditor petition, the creditor must usually show apparent insolvency, for example by serving a charge for payment after a court decree and allowing the time limit to expire without payment. Minimum debt thresholds apply and can change, so check current requirements before acting.

On award of sequestration, your assets and certain future assets vest in the trustee. Exempt items typically include basic household goods and tools needed for your trade. The trustee may seek a contribution from your disposable income, calculated using the Scottish Common Financial Tool. You must cooperate, provide information, and report changes in circumstances.

Most debtors are discharged from bankruptcy after around 12 months if they comply with their duties. Income contributions, if assessed, can continue for a longer period. The trustee has a limited window to deal with the family home, after which unsold interest may revert to you if no steps were taken. Debt types such as recent student loans, court fines, and liabilities arising from fraud are generally not discharged. Your bankruptcy is recorded on the public register and will affect your credit file for a set period.

Scotland offers a short moratorium period that can temporarily protect you from most creditor enforcement while you seek advice and prepare an application. You must apply properly for this protection through a money adviser or insolvency practitioner. Interest and charges have specific rules under each solution, and the Debt Arrangement Scheme can freeze interest while you repay what you owe through an approved plan.

Frequently Asked Questions

What is the difference between sequestration and bankruptcy?

They are the same process under Scots law. In Scotland it is called sequestration. In everyday language people still say bankruptcy. The rules and terminology are specific to Scotland and differ from England and Wales.

Will bankruptcy write off all my debts in Scotland?

Most unsecured debts are included, such as credit cards, loans, and council tax arrears. Some debts are excluded or survive, including student loans, court fines, and debts arising from fraud. Secured debts are treated differently, and the creditor can still enforce against the security, such as a mortgage over your home.

What happens to my home in Aberdeen if I go bankrupt?

Your interest in the property vests in the trustee. The trustee will consider equity, your household needs, and the cost and benefit of a sale. There are protections in Scots law, including a time limit for the trustee to act on a family home. In many cases there are options such as a third-party buyout of your share of equity. Always get legal advice before you apply if you own a home.

How long does Scottish bankruptcy last and will I pay from my income?

Most people are discharged after about 12 months if they meet their duties. If you can afford it, you may have to make a monthly contribution from disposable income for a set period calculated using the Scottish Common Financial Tool. The contribution period can extend beyond discharge.

Can creditors still chase me once sequestration starts?

Once sequestration is awarded, most creditors must stop direct collection and deal with the trustee. There are limited exceptions, such as ongoing actions by secured creditors enforcing their security. If you are being chased during sequestration, tell your trustee immediately.

Do I need to go to court in Aberdeen to go bankrupt?

Debtor applications are usually processed by the Accountant in Bankruptcy and do not require a court hearing. You may have to attend the Sheriff Court if a creditor petitions for your sequestration or if a specific dispute or appeal requires a hearing.

Will my employer find out and can I keep my job?

Bankruptcy is public and appears on the Register of Insolvencies. Employers are not routinely notified, but some roles and professional bodies restrict bankrupt individuals. Company directors need court permission to act. Check your employment contract and regulator rules, and seek advice before applying.

How does bankruptcy affect my business or company?

Sole traders can usually continue to trade, but trading names, banking, and credit will be affected. Your business assets vest in the trustee. If you are a company director, you cannot act as a director while bankrupt without court permission. Partnership interests and guarantees need careful advice.

Can I stop a bankruptcy or have it recalled?

There are legal routes to challenge or recall sequestration in certain circumstances, for example if the debt is paid in full or if the award was made in error. There are strict time limits. Get urgent legal advice if you receive a petition or if you seek recall.

What alternatives exist to bankruptcy in Scotland?

The Debt Arrangement Scheme lets you repay debts through an approved plan with interest and charges frozen. A Protected Trust Deed is a formal agreement to repay part of what you owe over a fixed period, leading to write off of the balance at the end. Minimal Asset Process bankruptcy is a simplified route for people with low income and low assets. A money adviser can help you assess which option fits your circumstances.

Additional Resources

Accountant in Bankruptcy, the Scottish Government agency that regulates personal insolvency, awards most debtor applications, supervises trustees, and keeps the Register of Insolvencies.

Register of Insolvencies, the public record of Scottish sequestrations, trust deeds, and Debt Arrangement Scheme cases. Useful to check case status and dates.

Aberdeen Sheriff Court, the local court that handles creditor petitions for sequestration and related applications and appeals.

Aberdeen Citizens Advice Bureau, offers free and confidential money advice, help with budgeting, benefits, and local referrals to approved money advisers.

Aberdeen City Council Money Advice and welfare rights teams, can provide local debt advice, help with council tax arrears, and signpost to approved advisers.

StepChange Debt Charity, provides free Scottish debt advice, including Debt Arrangement Scheme and assessment for trust deeds or sequestration.

National Debtline Scotland, a free telephone and online advice service with Scottish-specific guidance and budgeting tools.

Business Debtline, free advice for the self-employed and small businesses on Scottish debt options and dealing with creditors.

MoneyHelper, government-backed guidance on money, debt, and finding free local advice in Scotland.

Law Society of Scotland, can help you find a solicitor in Aberdeen with experience in insolvency and debt litigation.

Next Steps

Write down your full financial picture. List all creditors, balances, interest, enforcement action, and any court paperwork. Gather payslips, bank statements, tenancy or mortgage details, and evidence of priority bills.

Speak to a free, approved Scottish money adviser as soon as possible. They can explain the Debt Arrangement Scheme, Protected Trust Deeds, Minimal Asset Process, and standard sequestration, and they can issue a certificate if you apply for sequestration. Ask whether a moratorium is appropriate to pause most enforcement while you decide.

If you own a home, a vehicle of value, or run a business, consult a solicitor experienced in Scottish insolvency before committing to any option. Discuss equity, tools of trade, vehicles needed for work, and any guarantees. Ask about the likely treatment of your assets and whether a third-party buyout is realistic.

If you have received a statutory demand, a charge for payment, or a creditor petition, do not ignore it. There are short deadlines to respond, seek time to pay, or challenge the case. Contact a solicitor and a money adviser urgently.

Do not transfer or hide assets, prefer one creditor over others, or take on new credit without advice. Keep paying essential living costs if you can, such as rent, mortgage, utilities, and council tax, and explain your situation to other creditors.

Prepare a realistic budget using the Scottish Common Financial Tool approach. Be ready to explain income, expenses, and any special circumstances that affect affordability.

Ask professionals about fees, likely timelines, duties during sequestration, and what discharge means for you. Check whether you qualify for fee reductions or assistance. Keep copies of all forms and letters, and keep your adviser and trustee updated about any changes in your situation.

With the right guidance, you can choose the solution that best protects your home, employment, and long-term financial stability under Scottish law, and move toward a sustainable fresh start.