Debt Help in Scotland

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 Minimal Asset Process route to Sequestration (MAP)

• It is possible to write off 100% of your debt
• There are no fees or setup charges involved
• There is no minimum debt level required.
• 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.

*If you are in receipt of certain prescribed social security benefits then there is no application fee payable.

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 then there is no application fee payable.