Trust Deeds and sequestration are both formal debt procedures available to Scottish residents who are dealing with severe financial issues. Both processes enable you to become free of debt and start again financially, although there are characteristic differences.
When people enter into any form of debt solution, a common concern is whether it will become public knowledge. This can be an issue for a number of reasons, including the potential effect on employment.
A Scottish Trust Deed is an effective method of dealing with higher levels of debt, and protects you from bankruptcy. It may be suitable if your unsecured debts total £5,000 or more.
A repayment plan is set up giving careful consideration to your essential outgoings, so you aren’t overstretched financially. This increases your chances of being able to continue the Trust Deed throughout its term.
Sequestration is the Scottish term for bankruptcy, and this involves handing over all your assets to a Trustee. The assets are then sold at auction, and the proceeds used to repay part of your debt.
A Trust Deed and sequestration become public knowledge as both procedures are recorded on the Register of Insolvencies. This is a non-negotiable part of the process for each debt remedy, and the register is available for public view.
Unless an individual or company is specifically looking through the Register of Insolvencies, however, they won’t necessarily find out about your insolvency unless you disclose it to them.
So if you’re concerned that your employer might become aware of your debt situation, this isn’t always the case. Some professions and employers do legally require their employees to disclose their situation if they fall into debt, though, so it may be a requirement of your employment to let them know.
The Register of Insolvencies records public insolvencies, such as Scottish Trust Deeds and sequestrations. It’s an online register and available for public view, so what information might be included if you enter into a Trust Deed or are sequestrated?
This information is only removed from the Register of Insolvencies after one year following the discharge of your Trustee. It’s accessible by any member of the public, but as we’ve mentioned, your family and friends would have to actively search to find the record.
In some professions, including law and accountancy, there may be an issue if you should get into debt. Other types of employment could also be affected, such as the police or prison service.
It’s definitely worthwhile checking your contract of employment for any specific references that might lead to disciplinary action. It’s also worth noting that you could be prevented from holding certain offices in the future, such as school governor or treasurer.
Those typically searching the Register of Insolvencies include creditors, credit reference agencies, and banks, rather than members of the general public. So even though a Trust Deed or sequestration becomes public knowledge, the details may only be seen by a limited number of people.
If you’d like more information on Trust Deeds and sequestration, or indeed any other forms of debt help, please get in touch with Scotland Debt Solutions. We operate a network of offices in Scotland, and can offer free, same-day meetings.
The Register of Insolvencies is a public register that documents Trust Deeds until five years after the discharge date and includes personal details.
Joint Trust Deeds don’t exist, however, if you want to run a Trust Deed that encompasses debts as a couple, this will be two individual Trust Deeds.
Our Scottish based team can help advise you on your debt problems.