Help to understand both the similarities and differences between Trust Deeds vs Sequestration in Scotland.

Trust Deeds and Sequestration are two formal debt solutions in Scotland, alongside Debt Arrangement Scheme.

Sequestration is the Scottish equivalent of Bankruptcy whereas Trust Deeds are similar to an IVA.

When considering Trust Deeds vs Sequestration, there are some factors to consider and there are two types of Sequestration; Full Administration Bankruptcy and Minimal Asset Process Bankruptcy.

Trust Deeds vs Sequestration – Similarities

Both are personal insolvency solutions that provide legal solutions to unaffordable debt in Scotland, that help provide you with a route to a brighter future.

Both allow you to repay debt on your own terms, at your own affordability.
Stop creditor contact and further stops them taking legal action against you.
Helps write off a chunk of the debt you owe.
Remain on your credit report for 6 years, which makes it more difficult but not impossible to take out further credit.
Impacts employment, depending on the type of industry that you work in, and/or job function that you perform.

Trust Deeds vs Sequestration – Trust Deeds

Trust Deeds – Allow you to protect the things you care about most – Your home, your car and your ability to pay typical essential bills like mortgage, rent, council tax and day-to-day outgoings that you and your family need to live on.
Writes off debt after a typical period of 4 years. All 48 monthly payments are based on what you can afford to repay on your own terms.
Have no initial fees, and your Trustees fees are paid as part of the monthly affordable payments.
Typically requires a minimum unsecured debt of £5,000 to qualify.

Trust Deeds vs Sequestration – Sequestration

Sequestration – Will typically result in the sale of valuable assets such as your home.
Writes off the debt you owe within one year, but repayment may continue for 48 months.
May be invoked by your creditors rather than you based on how much you owe, this was recently amended to a minimum of £10,000 as part of the recent Coronavirus ( Scotland) Act.

Sequestration Considerations

It’s important to note that Sequestration has different benefits, risks and fees associated with Sequestration than with other debt management solutions.

Before you make a decision on whether or not to apply for Sequestration, you should seek expert debt advice as there are a number of considerations to think about. You can call Trust Deed Scotland® today on 0141 221 0999 for a quick chat about your situation, or allow us to provide you with a more personalised illustration of which options may be available for you.

Our advisors are friendly and non-judgemental, and their qualified, expert advice is confidential, balanced and without obligation.

Bankruptcy has both an emotional and social stigma attached to it throughout the world and this is no different here in Scotland.

We can feel a mixture of guilt and embarrassment when forced to consider Sequestration.

Every year, thousands of Scots are declared bankrupt and that is almost always as a result of circumstances beyond their control.

During difficult periods of recession, high unemployment and austerity measures, this has amplified these figures in recent years.

The social and emotional stigma may make you feel bad about your situation. However, Sequestration can sometimes be the most appropriate way to manage your debts and get yourself back in control of your finances.

There is also a financial stigma caused by Sequestration e.g. your credit score will worsen and any credit cards you apply for in the future will carry a higher interest rate.

If Sequestration is not right for your circumstances, or other alternatives exist, we’ll advise you on what other options are available to you.

You can be assured that in any situation all pros and cons would be explained and the decision you make is entirely your own.

Sequestration fees have been temporarily reduced for the most vulnerable as a result of recent changes brought on by the second Coronavirus Bill. MAP application fees are removed for those in receipt of specified benefits, and reduced to £50 from the current £90 for all others. Fees are reduced to £150 and are waived for those in receipt of specified benefits.

Trust Deeds Considerations

Again, it’s important to note that Trust Deeds have different benefits, risks and fees associated with Trust Deeds than with any other debt management solutions.

Before you make a decision on whether or not to enter into a Trust Deed, you should seek expert debt advice as there are a number of considerations to think about. You can call Trust Deed Scotland® today on 0141 221 0999 for a quick chat about your situation, or allow us to provide you with a more personalised illustration of which options may be available for you.

Our advisors are friendly and non-judgemental, and their qualified, expert advice is confidential, balanced and without obligation.

If you have assets, Trust Deeds are usually the preferred solution when measuring up Trust Deeds vs Sequestration.

In order to be considered for a Trust Deed, you need to have an income.

Only a licenced insolvency practitioner can administer a Trust Deed on your behalf and while there are no setup fees charged by Trust Deed Scotland® this may not be the case with other Trust Deed companies. If in doubt, you should ask the company what their setup fees are before proceeding and ask them for a full breakdown. You should never feel pressurised into proceeding

Creditors can vote against your Trust Deed becoming Protected, and you may consider it important to choose a company based on their ability to ensure your Trust Deed is protected.

Trust Deed Scotland® have a creditor acceptance rate of 99%. A Trust Deed would never be proposed on your behalf without explaining whether it was likely to be protected.

Failure to keep up repayment of your Trust Deed could ultimately result in you being Sequestrated. Therefore it’s important that you only proceed with a Trust Deed when it’s affordable to you. It’s possible to try and shoehorn you into fitting the Trust Deed criteria, but this doesn’t serve your interests if it results in your Trust Deed failing.

Trust Deed Scotland® will always have your best interests at heart, and our in-house team are with you every step of your journey. We’ll never sell your details onto another company.