If you’re living in Scotland and struggling with debt, you’re not alone. Many people face the tough decision between a Trust Deed and Bankruptcy. Both options can help you deal with overwhelming debt, but they work in different ways.
In this guide, we’ll break down the pros and cons of each, and help you figure out which might be better for your situation.
Before you decide, remember you can get a free Trust Deed assessment with Carrington Dean to see if it’s right for you.
What Is a Trust Deed?
A Trust Deed is a legal agreement between you and your creditors. It lets you pay back part of what you owe over four years. After that, if you’ve kept up with payments, the rest of your debt is usually written off.
Key Features:
- Only available in Scotland
- You make affordable monthly payments based on your income
- Unsecured debts like credit cards, loans, and overdrafts are covered
- You keep your home and car in most cases
- Creditors can’t take legal action once it starts
It’s a good option if you have a steady income but can’t manage your debts on your own.
What Is Bankruptcy?
Bankruptcy, also known as sequestration in Scotland, is a more serious step. It’s usually used when you can’t afford to repay any of your debts. When you go bankrupt, most of your debt is wiped out, but it comes with long-term consequences.
Key Features:
- Also available only in Scotland under the name sequestration
- You may have to sell valuable assets, like your home or car
- A trustee takes control of your finances
- Bankruptcy stays on your credit report for 6 years
- You may still need to make payments for up to 4 years
It may give you a clean break from your debt, but it can also be tough to recover from.
Which One Is Right for You?
Let’s look at the main differences between a Trust Deed and Bankruptcy side by side:
| Feature | Trust Deed | Bankruptcy (Sequestration) |
| Length of agreement | Usually 4 years | Usually 1 year (payments can last 4) |
| Keep your home/car | Often yes | At risk of being sold |
| Credit impact | 6 years | 6 years |
| Public record | Yes (public register) | Yes (public register) |
| Suitable for | People with regular income | People with little or no income |
| Free assessment? | Yes, with Carrington Dean | Not always |
Pros of a Trust Deed
- Less damaging than bankruptcy in the long term
- You’re protected from creditors once it’s approved
- Lets you make realistic payments based on what you can afford
- You may be able to keep your home and car
- Carrington Dean offers a free Trust Deed assessment, so you can explore your options risk-free
Pros of Bankruptcy
- Clears most debts quickly (often within a year)
- You don’t need to make payments if you have no disposable income
- Suitable for people with no valuable assets
Why Get a Free Assessment?
It’s not always easy to decide which option is best. That’s why Carrington Dean offers a free Trust Deed assessment. Their financial advisors will look at your income, debts, and living costs to help you understand your options. No pressure, no commitment just honest advice.
Final Thoughts
Choosing between a Trust Deed and Bankruptcy depends on your income, assets, and personal situation.
If you have a job and want to protect your home or car, a Trust Deed might be the better choice.
If you’re out of work or have no way to repay your debts, Bankruptcy could be your way forward.
Whatever you decide, take the first step by getting the facts. A free Trust Deed assessment with Carrington Dean can help you make the right choice so you can start fresh and feel in control again.