Can I enter into a Trust Deed as a sole trader when my business is struggling?

Being in debt as a sole trader can be particularly concerning because you are personally responsible for the debts of your business. Unlike a limited company which is a separate legal entity from its owners/directors, sole traders face the prospect of personal bankruptcy alongside the closure of their business.

There are a number of debt solutions that could help, however, and one of these is called a trust deed. It is only for Scottish residents, and allows you to repay a pre-agreed proportion of your debts, whilst writing off the remainder.

Are you eligible for a trust deed as a sole trader?

An insolvency practitioner, or money advisor, will let you know whether or not you meet the eligibility requirements for a trust deed. These include:

• Being a resident of Scotland
• Owing a minimum of £5,000 in unsecured debt
• Providing the necessary financial information and documentation to allow an informed assessment of your financial position
• Being able to pay a monthly amount from your income towards the debt

Clearly, if your business is struggling, making a regular monthly payment in this way might be difficult. It does not discount you, however, and your individual circumstances will be taken into account by the trustee.

The financial issues your business is experiencing may be viewed as temporary when looked at closely by your money advisor, who will see the whole picture of your personal and business finances combined.

There are many considerations to take into account if you are thinking of entering a trust deed as a sole trader. Scotland Debt Solutions can make sure you understand the benefits and drawbacks, and provide the professional advice you need. Call our highly experienced insolvency practitioners to arrange a same-day appointment free-of-charge.