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.
Our Scottish based team can help advise you on your debt problems.
Our personalised debt report will help you better understand your financial position and see where your money is going.
Arrange a call with an expert advisor at a time to suit you.
We have five offices located across Scotland. Find your nearest one here.
Sequestration is the Scottish version of bankruptcy and may be suitable for you if you do not have the money to pay back your debts
A Trust Deed involves making a monthly contribution to your debts for up to four years. After this time any remaining debt will be wiped out.
A Debt Arrangement Scheme (DAS) lets you pay off your debt through a series of manageable instalments over a reasonable length of time.
Whether you are a sole trader or a limited company director, we can help you work through your current financial problems including money owed to HMRC