Advantages & Disadvantages

Find out more about the pros and cons of formal debt solutions in Scotland

Advantages of a Protected Trust Deed

You are protected from legal action from creditors
One, affordable monthly payment, allowing for all general living expenses & household bills
Creditor contact will stop – your Trustee will liaise with your creditors, taking away the pressure of constant phone calls and distressing mail
Interest, fees and charges are frozen from the date your Protected Trust Deed is signed
A Protected Trust Deed does not involve court proceedings
Your home and other assets can be retained, subject to value and circumstances – do no delay in taking advice if you have assets that you wish to protect
If you are facing legal action, need help quickly and have chosen a Trust Deed as your debt solution then the Trust Deed can be signed immediately
An earnings arrestment will cease to have an effect on protection of the Trust Deed
After successfully completing a Trust Deed, you will be discharged from all remaining debts and the balances will be written off.

Disadvantages of a Protected Trust Deed

Your credit rating may be adversely affected
Creditors may object to the Trust Deed proposal in sufficient number or value, causing it to fail to achieve protected status
Granting a Trust Deed may result in you being refused credit, before or after your discharge is granted
You may not be able to act as a Director of a limited company, unless the company’s articles of association allow you to do so
Student loans are not discharged in a Trust Deed (or a Bankruptcy)
Equity in your property and/or other assets that you own may have to be realised for the benefit of your creditors, subject to value and your individual circumstances, do no hesitate to take advice if you have assets that you would like to protect
Your Protected Trust Deed will be registered on the Register of Insolvencies, a publicly available online register of all insolvencies in Scotland
Employment or future employment prospects may be affected by entering into a Trust Deed
In a Trust Deed, the Trustee has claim on assets acquired for a period of 4 years from the date of signing the Trust Deed e.g. inheritance

Advantages of the Debt Arrangement Scheme (DAS)

You make one, affordable payment to repay your debt(s)
Your creditors cannot take legal action against you to recover the debts owed to them
Any assets you own, including your home, are unaffected by DAS
Interest, fees and charges are frozen from the date your application is made and are written off when your DPP is completed
There are no fees to pay to apply for or have your DPP administered – see section on Fees for further info
An earnings arrestment will be stopped on the approval of your DPP under DAS
If your creditors reject your application, they can be forced to comply if the proposal is deemed to be ‘fair and reasonable’ by the DAS Administrator
Mortgage, secured loan and rent arrears can be excluded from your DPP
You do not have to pay your full disposable income into your DPP, a reduced amount can be offered to allow you more flexibility, subject to creditors’ approval
Payment breaks are available if you experience a reduction in income, for example, due to illness or unemployment or an unplanned increase in expenditure.
If your circumstances change permanently, then your DPP can be varied to reflect these changes, without putting your DPP at risk

Disadvantages of the Debt Arrangement Scheme (DAS)

In DAS there is no debt written off, only relief from further interest, fees and charges. Therefore, in DAS you are deemed to be repaying your debts in full and the repayment period is likely to be longer than the alternatives of a Protected Trust Deed or Sequestration
Your credit rating may be adversely affected, in a similar way to Trust Deeds and Sequestration
Your DPP may be rejected by creditors and deemed to be not ‘fair and reasonable’, meaning you may need to consider other options such as a Protected Trust Deed
Your DPP will be registered on the DAS Register, a publicly available online register of all DPPs in Scotland
If you do not comply with the conditions of your DPP then it may be revoked. Creditors are then free to pursue legal action against you and to add back their interest, fees and charges

Advantages of Full Administration route to Sequestration

It is possible to write off 100% of your debt
Your Trustee will deal with your creditors – taking away the pressure of the constant phone calls and distressing mail
Creditors cannot take legal action against you to recover their debt
Interest, fees and charges are frozen – the creditors can only claim for the outstanding balance due as at the date of sequestration
One, affordable monthly payment will be made, giving an allowance for all general living expenses and household bills
You will normally be discharged from sequestration after 1 year (assuming the Trustee does not have cause to delay the discharge)
The application to the AiB does not involve court proceedings
Sequestration stops or removes the effect of existing diligence e.g. an earnings arrestment or an Inhibition

Disadvantages of Full Administration route to Sequestration

Assets of a significant value are likely to be sold for the benefit of creditors
You are unable to act as a director of a limited company or be involved in the formation, promotion or day-to-day financial management of a limited company.
It may harm your employment prospects, both now and in the future
Student Loans are not discharged by Sequestration
Adverse impact on your credit rating
£150 application fee* to be paid to the Accountant in Bankruptcy
You cannot apply for credit of £2,000 or more, without telling the creditor that you have been made bankrupt and are under this restriction.
You cannot apply for credit of any amount when you already have debts of £1,000 or more, without telling the creditor that you have been declared bankrupt and are under this restriction.
If you are self-employed, you must tell anyone that you do business with the name of your business when they went bankrupt.
Your bankruptcy will be registered on the Register of Insolvencies, a publicly available online register of all insolvencies in Scotland
You are unable to act as a Member of Parliament or a Justice of the Peace.
You may be in breach of certain contractual obligations by being made bankrupt e.g. tenancy/lease agreements, various licences, employment contracts, HP agreements, insurances etc.

*If you are in receipt of certain prescribed social security benefits (e.g. Universal Credits, Child or Working Tax Credits) or you are assessed as having no surplus income then there is no application fee payable.

Advantages of the Minimal Asset Process route to Sequestration (MAP)

It is possible to write off 100% of your debt
Your Trustee will deal with your creditors – taking away the pressure of the constant phone calls and distressing mail
Creditors cannot take legal action against you to recover their debt
Interest, fees and charges are frozen – the creditors can only claim for the outstanding balance due as at the date of sequestration
You will normally be discharged from MAP after 6 months
The application to the AiB does not involve court proceedings
Sequestration stops or removes the effect of existing diligence e.g. an earnings arrestment or an Inhibition

Disadvantages of the Minimal Asset Process route to Sequestration (MAP)

You are unable to act as a director of a limited company or be involved in the formation, promotion or day-to-day financial management of a limited company.
It may harm your employment prospects, both now and in the future
Student Loans are not discharged
Adverse effect on your credit rating
For 6 months after your discharge, you cannot apply for credit of £2,000 or more, without telling the creditor that you are a discharged bankrupt
For 6 months after your discharge, you cannot apply for credit of any amount when you already have debts of £1,000 or more, without telling the creditor that you are a discharged bankrupt
For 6 months after your discharge, if you are self-employed, you must tell anyone that you do business with the name of your business when you were declared bankrupt
You are unable to act as a Member of Parliament or a Justice of the Peace.
You may be in breach of certain contractual obligations by being made bankrupt e.g. tenancy/lease agreements, various licences, employment contracts, HP agreements, insurances etc.

Alternative solutions

Depending on your circumstances, there are alternative ways of managing your unaffordable debts. See pages 21-22 of our free Scottish debt help guide for more info.

Statutory Moratorium
Debt Management Plan
Full & Final Settlement
Informal Negotiation
Debt-Write-Off
Debt Consolidation
Remortgage/Secured Loan
Equity Release

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Advertising Substantiation

98.5% of our proposed Trust Deeds gain protection status making us No.1 in Scotland last year

97.9% of our customers rated our service as Excellent on Trustpilot

99.9% of our proposed Debt Payment Programmes (DPPs) under the Debt Arrangement Scheme are approved by creditors

Write off up to 70% of your debt

No Setup Fees & Fees may apply

For life after debt, you can trust us

Find out more about the data behind our statistics.

98.5% of our proposed Trust Deeds gain protection status making us No.1 in Scotland last year

In 2021, we achieved a protection rate of 98.5%, this made us the best performing volume provider of Protected Trust Deeds in Scotland. Trust Deeds advertised between 01/01/21 and 31/12/21.

97.9% of our customers rated our service as Excellent on Trustpilot

Reviews collected between October 2012 and June 2022, a total number of 5,198 reviews were received, 5,089 people rated us as ‘excellent’. A further 107 people rated our service as ‘great’.

99.9% of our proposed Debt Payment Programmes (DPPs) under the Debt Arrangement Scheme are approved by creditors

In this sample of 1,144 Debt Payment Programmes (DPPs) under the Debt Arrangement Scheme (DAS), approved between July 2019 and October 2021, only 1 proposed DPP was rejected and unable to proceed.

Write off up to 70% of your debt

The expected debt write-off figure of up to 70% is based on 5,234 Protected Trust Deeds currently administered by Trust Deed Scotland® and granted between January 2017 and September 2021.

The expected write-off % includes the costs of administering each Protected Trust Deed (PTD). More information relating to the costs of administration can be found by clicking here.

In this sample of PTDs, the expected write-off figure reaches as high as 83%. 5% of the PTDs have an expected write-off figure between 71% and 83%. 95% of the PTDs have an expected write-off figure of up to 70%, the average (mean) being 45% when the costs of administration are included.

Of the cases in this sample, 1,823 were granted since the Covid-19 pandemic took effect in 2020. The average expected debt write-off for these cases is slightly higher at 49% when the costs of administration are included.

No setup fees & Fees may apply

Our initial advice is free and there are no setup fees. There will be no obligation to proceed with any of the solutions we offer. We will provide advice based on all debt solutions available in Scotland.

Should you choose to proceed with one of our solutions, there are fees associated with our services.

It is important these are fully explained before entering into a formal debt solution. You will always find us open about these fees and how they are charged.

For life after debt, trust us

When we make statements on our website or any other advertising forms such as…

For life after debt, you can trust us
If you do something about your debt today, you can stop worrying about it tomorrow
Trust Deed Scotland^® change lives for the better

We are referencing a 2022 survey of our existing Harper McDermott customers.

1,425 customers responded, with 84% saying that their mental health improved as a result of entering into a formal debt solution with us. In the same survey, 98.67% told of that they felt satisfied, or better with their choice of debt solution.

May not be suitable in all circumstances. Fees apply. Your credit rating may be affected.