Sequestration Vs. Trust Deeds In Scotland - Which Is The Best Option For Me?

The decision for sequestration isn’t as easy as many financial decisions. For example, when faced with the choice between saving money on a product or service, who doesn’t want to save a few pounds now and then? But when it comes to Sequestration an assortment of emotions make it a difficult choice to take even when it’s obvious that there are very few other suitable options.

 

Sequestration is one of the hardest choices you’ll make in your life and one complicated by other peoples opinion about it. Some people have a very strong reaction against the idea of being sequestrated and when faced with the possibility, will very likely look for other options. The most obvious one is a Trust Deed. Trust Deeds Scotland have many similarities to Sequestration but many crucial differences too, and it’s those differences that under the wrong circumstances can make your situation much worse over time. You may end up putting yourself through a lot more pain and suffering to achieve the same purpose at the end – to be free from the worry of debt and move on with your life

Sequestration Works For Lower Levels Of Debt

There is no monetary limit to qualify for a Trust Deed but you probably need to have debt of around £8,000 to make it worthwhile. Sequestration on the other hand can be applied for with as little as £1,500 debt, making it much more accessible for those people who know they don’t have any way of paying back their debts but are unhappy simply waiting for the balances to rise with fees and interest.

Sequestration May Require Monthly Payments

Once your payment for your application (petition) for sequestration has been accepted, the fees of the Trustee come from the sale of your assets beforeany balance goes to your creditors. The exception to this is if you earn enough money, and have enough disposal income once the sequestration is approved – that your IP may require you to make a monthly contribution for up to 36 months.  Trust Deeds require a payment every month for as much as 4 years in many cases, and may be less flexible when your living expenses go up and your wages come down. You can sometimes have your budget adjusted, but you have to apply to your Trustee for them to review your finances and abide by their decision.

Sequestration Lets You Get Your Life On Track Faster

A Trust Deed lasts up to 4 years and you will have to disclose windfalls or assets you recieve during that time. Sequestration on the other hand results in your discharge in just 12 months, allowing you to start to live normally again much earlier. Once your discharge is granted after 12 months you can start to slowly rebuild your life and your credit record.

 

Sequestration is not an easy option and certainly not an option for everyone, but for people with a lot of debt and too little income to repay it, sequestration can be a lifesaver. Some people struggle for years to pay back their debts on very little money, only to have something happen and end up being deeper in debt than when they started or having to be sequestrated anyway.

 

Sequestration is a way out of a perpetual debt cycle that is relatively quick, inexpensive and gives almost immediate relief from the stress of dealing with persistent and sometimes unpleasant creditors.

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Write Off Unaffordable Debts

In most circumstances an award of Bankruptcy will allow you to write off most of what you cannot afford to repay, i.e. liabilties such as unsecured loans and credit card debts will be dealt with by your Trustee. Note: There are some debts that cannot be written off. Click here* for more information on the limitations.
 

Free From Debt Pressures

Unlike a Trust Deed Scotland, Sequestration can make you totally free from provable debts, although you will have to make a contribution from your income for 3 years if you can afford to. Your Trustee takes over dealing with your creditors and you will be totally debt free subject to some limitations depending on your circumstances.
 

Government Legislation

A Sequestration is under the control of the Scottish Government and is intended to help people who are struggling wither finances. An award of Bankruptcy is not a debt management plan or IVA, meaning there are no regular monthly repayments to make, if you have no surplus income after meeting your normal monthly outgoings.

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