Frequently Asked Questions
Q. In Scotland is bankruptcy and sequestration the same thing?
A. Yes - Sequestration is the Scottish legal term for bankruptcy. The process of sequestration means to transfer the assets and property belonging to the debtor into the hands of a Trustee, who will then dispose of them for the benefit of the creditors.
Q. What is the difference between an Income Payment Agreement (IPA) and an Income Payment Order (IPO)?
A. Once sequestrated the trustee will assess if the debtor has any surplus income to make a contribution to the creditors. If they agree to a voluntary contribution this is an IPA, if they cannot agree the trustee may ask a sheriff to decide on the amount of contribution which must be paid, this is an IPO. The trustee will review the arrangement every six months. Both an IPA and an IPO last for three years from the date they were set up.
Q. What is diligence?
A. Diligence is the final stage in the process of debt recovery. It is the legal method of enforcing unpaid debts due under decrees and summary warrants from the Scottish Courts.
Q. What is a Charge for Payment?
A. A charge for payment is a formal request in writing served on the debtor by the creditor after they have obtained a decree from the court. It gives the debtor fourteen days to pay the debt if they are resident within the UK.
Q. What is the APR?
A. The letters stand for Annual Percentage Rate (of charge) which gives the cost of a credit agreement taking account of all the charges made under the agreement. It allows consumers to compare different credit deals and choose the one which suits them best.
Wiseradviser training programme for April '18 to March '19 now available at www.wiseradviser.org