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Bankruptcy Law in Glasgow, and the UK at large, is a legal measure designed to provide a fresh start for individuals or corporations who find themselves in an impossible financial situation. By declaring bankruptcy, a person's outstanding debts could be dissolved entirely or substantially reduced. However, this comes with various impacts such as damage to credit standings or loss of assets. The process is overseen by the Accountant in Bankruptcy (AiB), Scotland's bankruptcy service.
Bankruptcy cases can be complex and the laws surrounding them are detailed and specific. A lawyer helps navigate the complexities, providing clear advice on the impact of bankruptcy. This may include assessing your financial situation, presenting all available options, offering guidance on how to prevent future financial distress, and helping you understand your rights and obligations under bankruptcy. In more complicated matters, such as disputes related to property, a lawyer becomes indispensable to ensure your rights are protected.
In Scotland, bankruptcy is often referred to as ‘sequestration’ and follows rules set out in the Bankruptcy (Scotland) Acts. One key law is that you must owe at least £1,500 and less than £17,000 to apply for bankruptcy under the Minimal Asset Process (MAP), a route aimed at individuals with low income and few assets. Also, if the debt is over £3,000, creditors can force bankruptcy. Anyone who declares bankruptcy may have to make payments from their income for up to four years, and their details will be listed in the public Register of Insolvencies.
In general, you'll be discharged from bankruptcy after a year, although this could be extended. However, the bankruptcy mention will remain on your credit report for six years.
Most unsecured debts like credit cards and personal loans get wiped out in a bankruptcy, however, obligations like student loans, court fines, and some segments of tax debt aren't cleared.
You might be able to keep your home or car depending on your circumstances, but assets can be sold to repay creditors. If they're collateral against a loan, bankruptcy doesn't change this. You may need legal advice to negotiate these matters.
While bankruptcy is a public matter in Scotland, employers aren’t typically notified unless your job is related to finance or law enforcement or if your employment contract calls for such a notification.
Yes, businesses that are unable to reimburse their debts can declare bankruptcy. They will either be liquidated or restructured to repay the debt.
For free and impartial advice, consult Money Advice Service and Citizens Advice Scotland. To understand more about sequestration and Debt Arrangement Schemes, visit the Accountant in Bankruptcy (AiB) website. The National Debtline and StepChange are also helpful resources.
If you find yourself in need of legal assistance with bankruptcy, it's advisable to consult with a solicitor experienced in bankruptcy cases. They can give you a clear understanding of your situation, propose the best strategy based on your circumstances, and ensure you're well represented during the entire process. An initial consultation is often offered free of charge, allowing you to explore your alternatives with no commitment.
