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Advantages & Disadvantages of a Trust Deed

The Advantages of signing a Trust Deed:

  • Pressure from creditors is removed
  • All correspondence and queries will be dealt with by the Trustee
  • You can agree the proposal which will be put to creditors with your Trustee, therefore retaining a degree of control over your finances
  • A Trust Deed is less costly than sequestration, and should result in a better outcome for your creditors

The Disadvantages of signing a Trust Deed:

  • Existing arrestments continue to be effective. Although Councils who carry out earnings arrestments are generally willing to consider lifting arrestments upon Trust Deeds gaining protection
  • You cannot be a company director of a limited company unless the company’s Articles of Association state otherwise
  • The arrangement is binding on you as well as your creditors. If you were to default on the arrangement then the Insolvency Practitioner can petition for your Sequestration
  • Entering into any arrangement with your creditors may affect your credit rating
  • Creditors are not obliged to accept a proposal for a Trust Deed. However, the Trustee will negotiate with all of your creditors

For more information about Trust Deeds please visit our FAQ section