Trust Deeds (Scotland only)

Trust Deeds apply only in Scotland and are formal arrangements with creditors, similar to an IVA for residents in England.

In this case, a debtor grants a deed in favour of the trustee, transferring their assets to the trustee for the benefit of creditors.

The Trust Deed may be registered as "protected", ( provided certain conditions are met). This prevents creditors from petitioning for the debtor’s sequestration or taking any other steps to recover debts due to them. The consequences of signing a Trust Deed will be different for each individual or partnership due to variations in financial and personal circumstances.

Plus points.

All correspondence from creditors are dealt with by the Trustee, relieving the pressure off the debtor and placing the debtor - rather than creditors - in control of his or her financial situation. It also reduces the costs as a trust Deed is usually more flexible and less costly to administer than sequestration. It also allows debtors the right to fulfil certain public offices - this is not the case with sequestration.

Minus points.

Existing arrestments and other diligence will still be effective, for instance:

• Home owners may be forced to sell if creditors cannot be paid in full from other sources
• Debtors cannot trade on their own account or hold directorships of a limited company.

Taking professional advice is generally the best route to resolving debt problems. For us to asses which type of debt solution is most likely to help you out, click here.

If you would like further advice on wether a Trust Deed is right for you, enter your details below and we'll contact you. Our resident debt adviser, Wally Stone has over 20 years experience in finding the right debt solution for people in any situation. You can call him on 0845 466 0364 for advice on IVA's or other debt issues.