As well as having many advantages there are, of course, a few ‘disadvantages’ about entering into a Scottish Trust Deed.
Since the arrangement is legally binding once approved, it’s important to be aware of these and in this article we take a closer look at some of the more serious consequences.

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1. If you’re a property owner then you may well be required to release any equity in your property. Ultimately, this could mean that you’ll need to either re-mortgage or sell it at some point during the arrangement. There is also an option for the over 55 year olds of equity release in the form of a lifetime mortgage in order to clear the debt. This option will of course depend on the type of deed you have and whether equity release is a suitable option, so it’s always best to get independent professional advice” said Alastair Shields, a qualified equity release adviser from EquityReleaseScotland.org That said, this potential requirement isn’t set in stone and some debtors are able to avoid doing this – especially if the amount of equity in your property doesn’t justify this course of action. However, if you own a property then it’s certainly advisable to speak with your Trustee about this in more detail and before you decide whether a Scottish Trust Deed is the best way forward given your personal circumstances.
2. If you’ve already entered into any type of debt enforcement process (for example, deductions from your salary) then this can’t be incorporated into your Trust Deed. For this reason it’s always a good idea to take advice about any potential Trust Deed arrangement at the soonest opportunity – and before your creditors decide to take such action against you.
3. Whilst you’re likely to have a poor credit rating already, any Trust Deed arrangement will be noted on your credit record for a period of 6 years and will affect your ability to lend in the future. That said, some creditors will still consider extending credit, albeit at a much higher interest rate and/or with the additional requirement that you have a guarantor in place.

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4. If you fail to maintain your set monthly repayment under the terms of your Trust Deed Scotlandthen your creditors could choose to make you bankrupt – and this can have very serious consequences.
5. Whilst they’re unlikely to be viewed by your employer, friends or family, you should remain mindful that details of your Trust Deed will appear in the Edinburgh Gazette and will also be added to the Register of Insolvencies which can be viewed by members of the public.
6. Until such time as your Trust Deed has been discharged in full you’ll be very limited in terms of obtaining credit. In fact, you won’t be able to acquire any credit exceeding the sum of £250.00 and any such arrangement will have to be declared to your Trustee.

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7. If you have a limited company then you’ll no longer be able to stand as a Director. Consequently this can have very serious consequences if you’re a sole Director and dependent on your company’s income.
8. Finally, even if your Trust Deed has been granted ‘protected status’, it’s still not impossible for your Trustee and/or creditors to petition for your sequestration (bankruptcy) if they can prove such an arrangement would be more beneficial to your creditors.