McCoo Money

Eligibility

To qualify for sequestration, you must owe at least £3,000 in unsecured debts and have sought advice from an approved money advisor.

Process

Upon application, a trustee is appointed to manage your assets and liaise with creditors on your behalf. This trustee will assess your financial situation, which may involve selling certain assets to repay debts. The standard duration of sequestration is 12 months, during which you're typically not required to make payments. After this period, any remaining eligible debts are discharged.

Costs

Applying for sequestration involves a fee of £200.

Considerations

While sequestration provides debt relief, it significantly impacts your credit rating and may affect your ability to obtain credit in the future. Additionally, not all debts can be included; for instance, court fines, child maintenance payments, student loans, and secured debts like mortgages are excluded.

Before proceeding, it's crucial to consult with a licensed insolvency practitioner or a qualified debt advisor to determine if sequestration is the most suitable option for your financial circumstances.

Debt Write-Off
Most unsecured debts are legally written off after the sequestration period.
Creditor Protection
Creditors can no longer take legal action or chase you for payments.
Fresh Start
After typically 12 months, you are discharged from bankruptcy.
No Monthly Payments (in Some Cases)
If you have little to no disposable income, you may not need to make payments.

Credit Impact
Stays on your credit file for six years, making borrowing difficult.
Asset Risk
Valuable assets, including your home or car, may be sold to repay debts.
Asset Risk
Valuable assets, including your home or car, may be sold to repay debts.
Application Fee
There is a £200 fee to apply for sequestration.
Not All Debts Are Included
Certain debts, like student loans, child maintenance, and court fines, cannot be written off.

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(Here are some hypothetical examples of how a trust deed could work)

New Payment

£107/M

Jenny W

£9000 in Debt

Credit cards
Loans
Council Tax

Old payment pm

New Payment

£147/M

John H

£16000 in Debt

Finance
Loans
Overdrafts

Old payment pm

New Payment

£123/M

Jenny Wilson

£13000 in Debt

HMRC
Payday Loans
Credit Cards

Old payment pm

May not be suitable in all circumstances. Fees may apply, Entering into an TrustDeed will affect your credit rating, Any potential disadvantages of entering into an TrustDeed will be explained on application. A debt write off amount of between 25% and 75% is realistic, however, the debt write off amount for each customer differs depending upon their individual financial circumstances and is subject to the approval of their creditors.

Customers can get free debt counselling, debt adjusting and providing of credit information services from the MoneyHelper – an organisation set up by the Government to offer free and impartial advice to those in debt. For more information from MoneyHelper click here www.moneyhelper.org.uk You can find Government guidance on dealing with your creditors here.