What is the difference between a Trust Deed and bankruptcy (sequestration)?

A Trust Deed is a legal arrangement where you pay an affordable contribution to a trustee and clear your debts within a period of 3 years.  You can set up a Trust Deed at any time and do not have to wait for a creditor to take legal action against you, as is required in bankruptcy.  However, in bankruptcy, it is not always the case that you will pay a contribution as you would only do so if you have surplus income.

What if my Trust Deed fails to become protected?

This happens where sufficient creditors object within the five week period - this is becoming more common with consumer creditors who use the Insolvency Exchange.  Where this happens, we will generally convert the trust deed into bankruptcy, but nominating the same trustee as nominated under the trust deed, and with the same terms and conditions already agreed.  Bankruptcy carries the extra government levy of £100.

Will I be able to keep my home?

If you are a tenant and do not have rent arrears, there is generally no risk to your home with both bankruptcy and Trust Deeds.  If you are a homeowner, bankruptcy may not be the best option for you as you have no control as to how the trustee disposes of your share of the house.  If you arrange a Trust Deed with us, you have the benefit of meeting your trustee beforehand, and arriving at an agreement as to how your share of the house is dealt with.  You would only proceed with the Trust Deed if you were entirely happy with the terms and conditions being offered.

Can I still run my business if bankrupt or in a Trust Deed?

If you feel it is worth continuing with your trade or profession (now without the burden of your debts), it is generally possible to continue trading, but may require modifications to your business structure, particularly if the business has assets. 

Will it be public knowledge if I apply for a Trust Deed or bankruptcy?

Your details will be placed on the Accountant in Bankruptcy's Insolvency Register.  Anyone with an interest may inspect this on  www.aib.gov.uk      There is now no need to  place an advert in the Edinburgh Gazette.  There is never any notice placed in local newspapers, except for company liquidations.

Will my credit rating be effected?

Generally, using any debt remedy will afffect credit rating, but you may well take the view that damage is inevitable simply by being unable to maintain contractual instalments.  There is an argument that using debt remedies will repair a credit rating more quickly, as they deal with the situation and do not allow the default to perpetuate.

Why don't you run conventional debt management plans.

They generally are not a long term solution as they cannot be imposed on creditors and fail to control interest and charges.  The free sector can run these for you, and there are self help tools. Rather, we take a different view to debt management, especially if there is no or little disposable income for creditors.

Is DAS suitable for me?

If you can pay off all your debts within, say, ten years, then DAS is a good option.  Remember, you still pay your mortgage or rent as nornmal on top of the DAS payment.  Even if DAS is suitable, you may still wish to consider trust deed and bankruptcy options, as these will discharge you from debt sooner

I need to get rid of my company

We can quote for company liquidations, but these are generally very expensive, given the statutory costs and outlays such as advertising.  You may wish to consider dissolving your company instead  - we charge £250; creditors may object to the dissolution, but this may force them into the burden of liquidating your company at their expense.  We can advise and assist with the statutory forms if and when this happens.

Harassed by Creditors

Often , creditors may make a lot of noise as they, rightly, pursue their interests.  we can advise you on your interests, and what your position in law actually is.  It may be the case that creditors are not as dangerous as you would believe.