Trust Deeds v Sequestration
scottish Equivalent to an iva
What is a Trust deed?
A Trust Deed is similar to an iva, but is only used in scotland. A Trust Deed is a formal agreement between you and your creditors. It passes your assets and property to a Trustee to be administered for the benefit of the creditors and the payment of debts.
What is sequestration?
Sequestration is the scottish law version of bankruptcy. This not the only solution for serious debt problems.
Advantages of a Trust Deed over Sequestration
Debts are frozen at the date you sign the Trust deed. Creditors should direct correspondence to the Trustee rather than you.
You can still have a bank account. This is usually an instant access type account where you can use a cash card but no cheque book, cheque card or overdraft facility. We have a list of instant access bank accounts that may be suitable.
Any monthly payment based on your earnings may be increased or decreased if your circumstances change.
Restrictions of a Trust Deed
You cannot take out credit over £250 during the Trust Deed period.
Only the creditors who agree to the terms are bound by the Trust deed. Those not agreeing can still carry out various forms of enforcement available to them, including petitioning for your bankruptcy.
If you do not cooperate with the trustee, they can try to make you bankrupt
You cannot be a director of a limited company.
The Trustee must be a qualified Insolvency practitioner.
Protected Trust Deed
Providing it meets certain conditions, a Trust Deed may be recorded in the Register of insolvencies as a Protected Trust deed. This prevents the creditor from making you bankrupt so long you stick to the terms of the Trust deed. | 
