Best Bankruptcy Lawyers in Stonehaven

About Bankruptcy Law in Stonehaven, United Kingdom

If you live in Stonehaven in Aberdeenshire, the rules that govern personal bankruptcy are the law of Scotland. In Scotland, personal bankruptcy is called sequestration. It is overseen by the Accountant in Bankruptcy, the Scottish Government agency that administers personal insolvency. While people often use the word bankruptcy, most Scottish processes and documents will refer to sequestration.

Sequestration is a legal process that writes off qualifying unsecured debts when you cannot pay them. A trustee is appointed to deal with your assets and income for the benefit of your creditors. There are different routes into bankruptcy in Scotland, including a debtor application awarded by the Accountant in Bankruptcy and a creditor petition in the sheriff court. There is also a simplified route called Minimal Asset Process for people with low income and little or no assets.

Sequestration is only one option. Depending on your circumstances, the Debt Arrangement Scheme debt payment plan or a Protected Trust Deed may be more suitable. Good advice at the outset is important because each option has different effects on your home, car, business, and credit record.

Why You May Need a Lawyer

Many people complete Scottish bankruptcy with help from an approved money adviser without needing a solicitor. However, legal advice can be valuable or necessary in certain situations. You may benefit from a lawyer if a creditor has started court action to make you bankrupt and you want to oppose or negotiate, if you own a home in Stonehaven or elsewhere in Aberdeenshire and want to understand equity, buyout, or occupancy rights, if you are self employed, a partner, or a company director and need advice on business impacts, if there is a dispute with your trustee about income contributions, valuation of assets, or whether something is exempt, if you want to recall a sequestration or appeal a decision of the Accountant in Bankruptcy, if there are complex debts such as guarantees, joint debts, or cross border issues, if allegations of misconduct or fraud have been raised and you face bankruptcy restriction proceedings, or if you are considering alternatives such as a Protected Trust Deed and want an independent view of the risks and terms.

Local solicitors also understand the practice of the sheriff courts that serve Stonehaven residents and can coordinate with local advisers, the trustee, and the Accountant in Bankruptcy.

Local Laws Overview

Scottish insolvency law is distinct from the law in England and Wales. The main framework for personal bankruptcy is set out in the Bankruptcy Scotland Act 2016 and related regulations. For Stonehaven residents, the following points are especially relevant.

Routes into bankruptcy. You can apply for your own sequestration to the Accountant in Bankruptcy if you meet the legal tests, which include apparent insolvency or a certificate for sequestration from an approved money adviser. A creditor can petition the sheriff court to make you bankrupt if you owe at least a set minimum amount and they can show apparent insolvency, for example a charge for payment that has expired without payment.

Administrator and trustee. The Accountant in Bankruptcy awards debtor applications and will either act as your trustee or appoint a licensed insolvency practitioner to do so. The trustee gathers and sells non exempt assets and may collect an income contribution.

Statutory moratorium. You can apply for a short moratorium that temporarily stops most diligence such as bank arrestments and earnings arrestments while you get advice and decide on a solution. The moratorium runs for a limited period and has rules about how often you can use it.

Income contributions. If you have surplus income after reasonable household costs assessed under the Common Financial Tool, the trustee can seek an Income Contribution Order. Contributions can continue for a number of months even after you are discharged from bankruptcy.

Assets and exemptions. Essential household goods, tools of trade, and a modest value vehicle may be exempt up to limits set by regulations. The trustee must deal with your interest in the family home within a set three year period or your interest may revert to you. Options include selling, arranging a third party buyout of equity, or taking no action if there is little or no equity.

Discharge and restrictions. Discharge from bankruptcy usually occurs after around 12 months if you cooperate, but misconduct can lead to a Bankruptcy Restrictions Order or Undertaking that extends certain restrictions for several years. Bankruptcy is recorded on the public Register of Insolvencies and will affect your credit file for a period.

Alternatives. The Debt Arrangement Scheme is a government backed repayment plan that freezes interest and charges and protects you from diligence while you repay what you can afford. A Protected Trust Deed is a voluntary agreement managed by a trustee that typically runs for several years and may write off remaining unsecured debt at the end if you meet the terms.

Local procedure. Stonehaven is within Aberdeenshire. Debtor applications are made to the Accountant in Bankruptcy. Creditors who petition for sequestration normally raise proceedings in the sheriff court that covers your home address, which for Stonehaven residents is commonly Aberdeen Sheriff Court. Local advice on Aberdeenshire Council debts such as council tax and on diligence such as arrestments can be important.

Frequently Asked Questions

What is the difference between bankruptcy and sequestration in Scotland

They are the same for individuals. In Scotland the legal term is sequestration. Many people still say bankruptcy in everyday language, but official forms, guidance, and the court will refer to sequestration.

Who handles bankruptcy for Stonehaven residents

The Accountant in Bankruptcy administers debtor applications and maintains the public register. If a creditor petitions for your sequestration, the case is heard in the sheriff court that covers your area, typically Aberdeen Sheriff Court. A trustee, either the Accountant in Bankruptcy or a licensed insolvency practitioner, manages your case.

How do I apply and am I eligible

You can apply if you cannot pay your debts and meet legal criteria such as apparent insolvency or having a certificate for sequestration from an approved money adviser. There is also a Minimal Asset Process route for people with low income and limited assets. A local money adviser can check your eligibility, help with the forms, and submit your application to the Accountant in Bankruptcy.

How much does it cost to go bankrupt in Scotland

There is an application fee payable to the Accountant in Bankruptcy. The fee differs depending on the route and there are limited fee reductions or exemptions in some circumstances. Your trustee also takes fees from assets or contributions as set by regulations. Ask an adviser for the current figures before you apply.

Will I lose my home or car

It depends on equity and value. The trustee must consider your interest in your home and will usually look at selling, a family buyout of your share of equity, or taking no action where there is no meaningful equity. For vehicles, a car needed for work or family use may be kept if it is modest in value within regulatory limits. Every case is fact specific, so legal advice is recommended if you own or part own property or higher value assets.

How long does sequestration last

Most people are discharged after around 12 months if they cooperate. If you are asked to make income contributions, these can continue for a number of months after discharge. Bankruptcy restrictions can be extended by court order if there was misconduct.

What debts are not written off

Certain debts normally survive bankruptcy. Common examples are student loans, court fines, some maintenance and child support liabilities, and debts arising from fraud. Secured debts such as mortgages are treated differently because the security remains over the asset.

Can creditors still contact me or take money from my wages or bank after I am made bankrupt

After sequestration is awarded most enforcement action must stop and creditors should deal with the trustee. Existing arrestments and inhibitions are subject to complex rules, and funds already arrested may sometimes be retained. If creditors continue to chase you, tell your trustee and provide your case details.

What happens to my job or business

Many jobs are unaffected, but some roles and professional registrations have restrictions. You cannot act as a company director without court permission. Sole traders can usually continue to trade but must follow bankruptcy restrictions, such as disclosure when obtaining significant credit. Check your contract and regulator rules and take advice if you are self employed, a partner, a director, or hold a licence.

Can a bankruptcy be stopped or reversed

In some situations a sequestration can be recalled by the sheriff court, for example if the debt is paid in full or the legal basis for the order was not met. There are strict criteria and time limits. You should take urgent legal advice if you want to oppose a petition or seek recall.

Additional Resources

Accountant in Bankruptcy Scotland. The national body that administers sequestration, the Register of Insolvencies, and the Debt Arrangement Scheme. Provides official guidance and forms.

Kincardine and Mearns Citizens Advice Bureau Stonehaven. Local free advice on debt, benefits, and consumer issues, including help with sequestration, DAS, and trust deeds.

Aberdeenshire Council Money Advice and Welfare Rights. Free local authority debt advice, useful if you have council tax arrears or need budgeting support.

Aberdeen Sheriff Court. Handles creditor petitions and court applications related to sequestration for Stonehaven residents.

StepChange Debt Charity. National charity offering free debt advice on Scottish options including DAS, trust deeds, and sequestration.

National Debtline Scotland. Freephone advice service with specialist guidance on Scottish debt law and template letters.

Business Debtline. Free advice for sole traders and small businesses in Aberdeenshire on trading debts and insolvency options.

Insolvency Practitioners in Aberdeen and Aberdeenshire. Licensed professionals who can act as trustees in sequestration or set up trust deeds where suitable.

Next Steps

Gather information. Collect recent bills, creditor statements, court papers, wage slips, bank statements, tenancy or mortgage documents, and a list of assets. Having accurate figures will make your advice session far more effective.

Speak to a free money adviser. Contact a local Citizens Advice Bureau or Aberdeenshire Council money advice service to review all your options. Ask about a statutory moratorium if you are facing urgent enforcement.

Check Scottish options. Ask the adviser to compare sequestration, the Debt Arrangement Scheme, and a Protected Trust Deed in light of your income, assets, and goals. Consider how each option affects your home, car, business, and credit record.

Decide on representation. If you have a court petition, own property, run a business, or have a dispute with a trustee, contact a solicitor experienced in Scottish insolvency. Ask about fees, timescales, and likely outcomes. Confirm which sheriff court serves your address.

Prepare your application or response. For a debtor application, complete the forms and pay the fee to the Accountant in Bankruptcy with help from your adviser. For a creditor petition, do not ignore court papers. Attend court and seek advice immediately if you plan to oppose or negotiate.

Cooperate with your trustee. If you are made bankrupt, keep the trustee updated, provide documents promptly, and discuss income contributions and any assets that may be exempt. If you disagree with a decision, ask about the review, appeal, or complaint routes.

Plan for the future. Open a basic bank account, set a realistic budget, and keep records. When your bankruptcy ends, check your credit files and follow up on any entries that should be updated. If you kept your home, consider long term affordability and insurance.

Getting the right advice early can protect your rights and help you choose the route that best fits your situation in Stonehaven.