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Can I remortgage while in a Trust Deed / Sequestrated / DAS?

Sharon McDougall - Updated - 6th March 2025 - 2 minutes to read

If you’re a homeowner in Scotland, and are experiencing high levels of debt, your property may be affected when you enter a formal debt relief procedure such as a Trust Deed, Debt Arrangement Scheme (DAS) or Sequestration.

This doesn’t necessarily mean you’ll be unable to remortgage your property, but you may find your options are more limited. In some cases, you will actually be required to remortgage your property as a condition of the debt solution in order to raise funds for creditors. 

Here we look at the three main debt relief solutions in Scotland, and how remortgages are affected by each.

Remortgages and trust deeds

When you’ve already taken out a mortgage on your home, or if you own it outright, it’s likely your trustee will require you to release some of the equity tied up in the property at the end of the trust deed term which is generally four years.

Whether this will be required will depend on the amount of equity you have in your home. Equity is calculated as the value of your property minus any outstanding mortgage balance.

As long as there’s sufficient equity available to make the transaction worthwhile, the money will be used to repay your creditors. Otherwise, you’ll have to extend the trust deed term by a further 12 months.

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Can you remortgage your property if sequestrated?

When you’re sequestrated, your assets (which includes your home) pass to the trustee who must sell them to achieve the highest possible return for creditors. In the case of your home, however, the trustee generally aims to help you stay there if possible.

Being sequestrated severely limits your ability to obtain any form of borrowing, but if the property is jointly-owned, the joint owner may be in a position to remortgage in their sole name, effectively purchasing your share of the property.

In some cases, family or friends may wish to invest in property, and be able to buy you out with a view to renting it back to you. They receive an income from their investment, and you can continue to live in the property.

How to remortgage under the Debt Arrangement Scheme (DAS)?

The Debt Arrangement Scheme differs from Sequestration and Trust Deeds in that you repay your debts in full, but over a longer term. Although DAS doesn’t involve formal insolvency, the procedure does negatively affect your credit rating.

So if you decide to remortgage, any current remortgage deals will be out of reach. There are lenders who specialise in remortgages for people with bad credit, however. This generally involves paying a higher rate of interest, or agreeing to other generally unfavourable terms when compared with a ‘standard’ remortgage.

If you are struggling with debt and are concerned how this could impact your home or mortgage either now or in the future, Scotland Debt Solutions are here to help.

We can help talk you through your options which may include a trust deed, sequestration, or a Debt Arrangement Scheme (DAS). Talk to a member of the team today for immediate help and advice.

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Sharon McDougall

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