Trust Deeds (Scotland)

Assets

Assets are property you own that you could offer to your trustee to negotiate with your creditors. These assets could include anything from your house and car to your jewellery and cash.

Bankruptcy

This is the final option of debt relief. When you're unable to pay your debts and all other debt management measures have failed, you'll be declared bankrupt and your assets can be seized to pay off your creditors. If you live in Scotland, a trust deed could be a great alternative to bankruptcy.

Credit History

Your credit history is a record of all the financial transactions you've made. It will include things like mobile phone contracts you've taken out and mortgages you've set up, and any payments you've failed to make will be recorded in it.

Credit Rating

When deciding if you're financially reliable, a lender will request your credit rating. Based on your credit history, your rating also uses details such as how long you've spent with your current bank and what your employment status is. It should give any potential lender a pretty good idea of whether or not you're likely to pay back any loan.

Creditor

A creditor is somebody who is owed money by another. A simple example would be that if you borrowed £10 from your dad, he is now a creditor.

Debtor

A debtor is somebody who owes money. Using the example above, if you've borrowed £10 from your dad, you are now a debtor

IVA

This is similar to a trust deed but is the English equivalent. An IVA does not involve surrendering any assets, however.

Sequestration

In Scotland, the official legal term for bankruptcy is sequestration. For more details about what this means, see "Bankruptcy" above

Trust Deed

A trust deed is similar to the English IVA and is only available to those living in Scotland. It will involve you initially offering assets for your trustee to negotiate with and you'll then make regular monthly repayments during the course of the trust deed. When the trust deed is completed, any outstanding debt will be wiped clean and you'll be considered debt free.

Trustee

This is the individual who operates as a middleman between yourself and your creditors. It'll be into his care you sign your assets and he will be the one to negotiate with the creditors on your behalf.