If you’re a Scottish resident struggling with personal debt and you’re considering a trust deed or sequestration as possible solutions, it’s important to realise that some types of debts cannot be managed within a formal insolvency procedure.
Below, we’ll discuss the types of debts that can be accepted into a trust deed or sequestration – and potentially be written off.
In any insolvency procedure, the only liabilities that can be written off are unsecured debts.
Understanding the difference between secured and unsecured debts can help you determine how much of your debt can be managed through a trust deed or sequestration process.
The primary difference between an unsecured debt and a secured debt lies in whether you used property or assets to secure the debt.
Examples of unsecured debts, which can be covered by a trust deed or sequestration:
Examples of secured debts, which cannot be included in a trust deed or sequestration arrangement:
In addition to secured loans, there are other types of debt that cannot be managed using a trust deed or sequestration arrangement. These include:
The above examples are by no means exhaustive; there are other types of secured and unsecured debts but we’ve covered the most common. If you’re still curious about which debts you’ll be able to manage using a trust deed or sequestration, or if you have questions about any issue related to insolvency in Scotland, contact Scotland Debt Solutions today.
The government has introduced a range of measures to help individuals, families, and sole traders in Scotland who are struggling to cope financially due to the coronavirus pandemic.
When you apply for a personal loan it’s important to be open with the lender and tell them exactly what the loan is for.
Our Scottish based team can help advise you on your debt problems.