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Advantages & Disadvantages
Find out more about the pros and cons of formal debt solutions in Scotland such as a Trust Deed and the Debt Arrangement Scheme (DAS).
Advantages of a Protected Trust Deed
- You are protected from legal action from creditors
- One, affordable monthly payment, allowing for all general living expenses & household bills
- Creditor contact will stop – your Trustee will liaise with your creditors, taking away the pressure of constant phone calls and distressing mail
- Interest, fees and charges are frozen from the date your Protected Trust Deed is signed
- A Protected Trust Deed does not involve court proceedings
- Your home and other assets can be retained, subject to value and circumstances – do no delay in taking advice if you have assets that you wish to protect
- If you are facing legal action, need help quickly and have chosen a Trust Deed as your debt solution then the Trust Deed can be signed immediately
- An earnings arrestment will cease to have an effect on protection of the Trust Deed
- After successfully completing a Trust Deed, you will be discharged from all remaining debts and the balances will be written off.
Disadvantages of a Protected Trust Deed
- Your credit rating may be adversely affected
- Creditors may object to the Trust Deed proposal in sufficient number or value, causing it to fail to achieve protected status
- Granting a Trust Deed may result in you being refused credit, before or after your discharge is granted
- You may not be able to act as a Director of a limited company, unless the company’s articles of association allow you to do so
- Student loans are not discharged in a Trust Deed (or a Bankruptcy)
- Equity in your property and/or other assets that you own may have to be realised for the benefit of your creditors, subject to value and your individual circumstances, do no hesitate to take advice if you have assets that you would like to protect
- Your Protected Trust Deed will be registered on the Register of Insolvencies, a publicly available online register of all insolvencies in Scotland
- Employment or future employment prospects may be affected by entering into a Trust Deed
- In a Trust Deed, the Trustee has claim on assets acquired for a period of 4 years from the date of signing the Trust Deed e.g. inheritance
Advantages of the Debt Arrangement Scheme (DAS)
- You make one, affordable payment to repay your debt(s)
- Your creditors cannot take legal action against you to recover the debts owed to them
- Any assets you own, including your home, are unaffected by DAS
- Interest, fees and charges are frozen from the date your application is made and are written off when your DPP is completed
- There are no fees to pay to apply for or have your DPP administered – see section on Fees for further info
- An earnings arrestment will be stopped on the approval of your DPP under DAS
- If your creditors reject your application, they can be forced to comply if the proposal is deemed to be ‘fair and reasonable’ by the DAS Administrator
- Mortgage, secured loan and rent arrears can be excluded from your DPP
- You do not have to pay your full disposable income into your DPP, a reduced amount can be offered to allow you more flexibility, subject to creditors’ approval
- Payment breaks are available if you experience a reduction in income, for example, due to illness or unemployment or an unplanned increase in expenditure.
- If your circumstances change permanently, then your DPP can be varied to reflect these changes, without putting your DPP at risk
Disadvantages of the Debt Arrangement Scheme (DAS)
- In DAS there is no debt written off, only relief from further interest, fees and charges. Therefore, in DAS you are deemed to be repaying your debts in full and the repayment period is likely to be longer than the alternatives of a Protected Trust Deed or Sequestration
- Your credit rating may be adversely affected, in a similar way to Trust Deeds and Sequestration
- Your DPP may be rejected by creditors and deemed to be not ‘fair and reasonable’, meaning you may need to consider other options such as a Protected Trust Deed
- Your DPP will be registered on the DAS Register, a publicly available online register of all DPPs in Scotland
- If you do not comply with the conditions of your DPP then it may be revoked. Creditors are then free to pursue legal action against you and to add back their interest, fees and charges
Advantages of Full Administration route to Sequestration
- It is possible to write off 100% of your debt
- Your Trustee will deal with your creditors – taking away the pressure of the constant phone calls and distressing mail
- Creditors cannot take legal action against you to recover their debt
- Interest, fees and charges are frozen – the creditors can only claim for the outstanding balance due as at the date of sequestration
- One, affordable monthly payment will be made, giving an allowance for all general living expenses and household bills
- You will normally be discharged from sequestration after 1 year (assuming the Trustee does not have cause to delay the discharge)
- The application to the AiB does not involve court proceedings
- Sequestration stops or removes the effect of existing diligence e.g. an earnings arrestment or an Inhibition
Disadvantages of Full Administration route to Sequestration
- Assets of a significant value are likely to be sold for the benefit of creditors
- You are unable to act as a director of a limited company or be involved in the formation, promotion or day-to-day financial management of a limited company.
- It may harm your employment prospects, both now and in the future
- Student Loans are not discharged by Sequestration
- Adverse impact on your credit rating
- £150 application fee* to be paid to the Accountant in Bankruptcy
- You cannot apply for credit of £2,000 or more, without telling the creditor that you have been made bankrupt and are under this restriction.
- You cannot apply for credit of any amount when you already have debts of £1,000 or more, without telling the creditor that you have been declared bankrupt and are under this restriction.
- If you are self-employed, you must tell anyone that you do business with the name of your business when they went bankrupt.
- Your bankruptcy will be registered on the Register of Insolvencies, a publicly available online register of all insolvencies in Scotland
- You are unable to act as a Member of Parliament or a Justice of the Peace.
- You may be in breach of certain contractual obligations by being made bankrupt e.g. tenancy/lease agreements, various licences, employment contracts, HP agreements, insurances etc.
*If you are in receipt of certain prescribed social security benefits (e.g. Universal Credits, Child or Working Tax Credits) or you are assessed as having no surplus income then there is no application fee payable.
Advantages of the Minimal Asset Process route to Sequestration (MAP)
- It is possible to write off 100% of your debt
- Your Trustee will deal with your creditors – taking away the pressure of the constant phone calls and distressing mail
- Creditors cannot take legal action against you to recover their debt
- Interest, fees and charges are frozen – the creditors can only claim for the outstanding balance due as at the date of sequestration
- You will normally be discharged from MAP after 6 months
- The application to the AiB does not involve court proceedings
- Sequestration stops or removes the effect of existing diligence e.g. an earnings arrestment or an Inhibition
Disadvantages of the Minimal Asset Process route to Sequestration (MAP)
- You are unable to act as a director of a limited company or be involved in the formation, promotion or day-to-day financial management of a limited company.
- It may harm your employment prospects, both now and in the future
- Student Loans are not discharged
- Adverse effect on your credit rating
- For 6 months after your discharge, you cannot apply for credit of £2,000 or more, without telling the creditor that you are a discharged bankrupt
- For 6 months after your discharge, you cannot apply for credit of any amount when you already have debts of £1,000 or more, without telling the creditor that you are a discharged bankrupt
- For 6 months after your discharge, if you are self-employed, you must tell anyone that you do business with the name of your business when you were declared bankrupt
- You are unable to act as a Member of Parliament or a Justice of the Peace.
- You may be in breach of certain contractual obligations by being made bankrupt e.g. tenancy/lease agreements, various licences, employment contracts, HP agreements, insurances etc.
Alternative solutions
Depending on your circumstances, there are alternative ways of managing your unaffordable debts. See pages 20-21 of our free Scottish debt help guide for more info.
- Statutory Moratorium
- Debt Management Plan
- Full & Final Settlement
- Informal Negotiation
- Debt-Write-Off
- Debt Consolidation
- Remortgage/Secured Loan
- Equity Release
May not be suitable in all circumstances. Fees apply. Your credit rating may be affected.
Free debt counselling, debt adjusting and providing of credit information services is available to customers by contacting MoneyHelper.
Advertising Substantiation
98.6% of our proposed Trust Deeds gain protection status making us No.1 in Scotland
98.1% of our customers rated our service as Excellent on Trustpilot
99.8% of our proposed Debt Payment Programmes (DPPs) under the Debt Arrangement Scheme are approved by creditors
Write off up to 70% of your debt
No Setup Fees & Fees may apply
For life after debt, you can trust us
We have more 5 Star Reviews on TrustPilot than all other Trust Deed providers combined
Half our customers waited a year or more before they did something about their debt
Every 42 minutes someone uses a Scottish debt solution to either write off all or part of their debt…or just repay what they owe with no more interest or charges.
Find out more about the data behind our statistics.
98.6% of our proposed Trust Deeds gain protection status making us No.1 in Scotland
In 2023 – We achieved a protection rate of 98.6%. This made us the best performing volume provider of Protected Trust Deeds in Scotland. Trust Deeds advertised between January 2023 and December 2023.
98.1% of our customers rated our service as Excellent on Trustpilot
Reviews collected between October 2012 and March 2024. A total number of 9,318 reviews were received, 9,138 people rated us as ‘excellent’. A further 162 people rated our service as ‘great’.
99.8% of our proposed Debt Payment Programmes (DPPs) under the Debt Arrangement Scheme are approved by creditors
In this sample of 2,839 Debt Payment Programmes (DPPs) under the Debt Arrangement Scheme (DAS), approved between January 2021 and December 2023, only 7 proposed DPP were rejected and unable to proceed.
Write off up to 70% of your debt
*The expected debt write-off figure of up to 70% is based on 1,671 Protected Trust Deeds currently administered by Trust Deed Scotland® and protected between 1 January 2023 and 31 December 2023.
The expected write-off percentage includes the costs of administering each Protected Trust Deed (PTD). More information relating to the costs of administration can be found by clicking here.
In this sample of PTDs, the expected write-off figure reaches as high as 84%. 226 PTDs or 13.5% of the cases have an expected debt write-off percentage between 70% and 84%. The average (mean) expected write-off is 51%.
No setup fees & Fees may apply
Our initial advice is free and there are no setup fees. There will be no obligation to proceed with any of the solutions we offer. We will provide advice based on all debt solutions available in Scotland.
Should you choose to proceed with one of our solutions, there are fees associated with our services.
It is important these are fully explained before entering into a formal debt solution. You will always find us open about these fees and how they are charged.
For life after debt, trust us
When we make statements on our website or any other advertising forms such as…
- For life after debt, you can trust us
- If you do something about your debt today, you can stop worrying about it tomorrow
- Trust Deed Scotland® change lives for the better
We are referencing a 2023 survey of our existing Harper McDermott customers.
2,246 customers responded, with 89% saying that their mental health improved as a result of entering into a formal debt solution with us. In the same survey, 98.8% told of that they felt satisfied, or better with their choice of debt solution.
| Trust Deed Provider | Number of 5 Star TrustPilot Reviews |
|---|---|
| Trust Deed Scotland® | 10,706 |
| Carrington Dean | 5,656 |
| J3 Debt Solutions | 1,708 |
| Your Expert Group | 181 |
| WB Debtcare | 117 |
| Interpath Ltd | 2 |
| Begbies Traynor | 0 |
All Trust Deed providers. TrustPilot only, no other review platforms were selected.
Date range – 01/01/2009 – 06/12/2024
Half of our customers waited a year or more before they did something about their debt.
When we make this statement on our website or any other advertising forms, We are referencing a 2023 survey of our existing Harper McDermott customers.
2,246 customers responded, with 49.3% of our customers telling us that they waited a year or more before asking for help with their debts. In the same survey, 98.8% told of that they felt satisfied, or better with their choice of debt solution.
Every 42 minutes someone uses a Scottish debt solution to either write off all or part of their debt…or just repay what they owe with no more interest or charges.
In Scotland, Between 1 Jan 2024 and 31 March 2024 a total of 1,281 people entered into a Protected Trust Deed, 605 people were awarded Bankruptcy (Sequestration) and 1,234 people were approved for a Debt Payment Programme under the Debt Arrangement Scheme. These statutory debt solutions total 3,120 people. With 394,560 minutes during the period, this equates to a person using a Scottish debt solution every 42.0000 minutes.
During this same period, Trust Deed Scotland® (Harper McDermott Ltd) had 449 Trust Deeds gain protection status, had a further 365 approved Debt Payment Programmes under the Debt Arrangement Scheme, and a total of 0 Bankruptcies awarded. With a total number of 814 formal debt solutions approved during the period, this makes Trust Deed Scotland® (Harper McDermott Ltd) the leading provider overall. Informal debt solutions such as Debt Management Plans are not included in these statistics.
More information on these statistics are available from the Accountant in Bankrupty.