Scotland: dealing with the debtor's home in sequestration
Produced in partnership with James Lloyd of Harper Macleod LLP
Scotland: dealing with the debtor's home in sequestration

The following Restructuring & Insolvency practice note produced in partnership with James Lloyd of Harper Macleod LLP provides comprehensive and up to date legal information covering:

  • Scotland: dealing with the debtor's home in sequestration
  • Coronavirus (COVID-19)
  • Position where debtor is sole owner of property
  • Position where debtor owns the property with another party
  • What is a ‘Family Home’?
  • What is the effect of a property being a Family Home?
  • What if the Relevant Consent cannot be obtained?
  • Powers of the sheriff
  • Re-vesting of the debtor's interest in a family home
  • Protection of rights of spouses and civil partners against arrangements intended to defeat them
  • More...

In the majority of sequestrations where the debtor has assets these will include the debtor's home (see Practice Note: Scotland: the process for applying for sequestration). In many cases this will be the only asset which the debtor owns, either solely or in common with a third party, normally a spouse or partner. For a glossary of commonly used Scottish insolvency terms, see Practice Note: Glossary of Scottish insolvency words and expressions

The trustee is under an obligation to realise that interest in order that it can be distributed among the debtor's creditors. Trustees prefer to avoid the inconvenience and expense of having to evict debtors and their families and then having to market and sell their homes. They would much prefer that the debtor or a third party buys out their interest and will, wherever possible, try to engage with the debtor to explore whether or not such an offer might be forthcoming.

In many cases the debtor is unwilling or simply unable, to buy their property back from the trustee. If, in such circumstances, the debtor is not prepared to cooperate with the trustee in selling the home, the trustee will have to resort to the courts to have the debtor and their family removed. This exercise can present a trustee with a number of challenges and the purpose of this Practice Note is

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