Hi AberdeenPhoenix,

I don't understand why more people don't consider bankruptcy. From what I can see there's not a great deal of difference between bankruptcy and a Trust Deed. The main obstacle appears to be the £200 application fee, but the payment period and time it stays on your credit file are the same.

I know this is a Trust Deed forum, but there are other debt solutions available.

Welcome to the forum AberdeenPheonix.

I'm really pleased to hear that reaching out for help has been a positive experience for you. It's great that you now don't face that massive level of debt repayment each month and have light at the end of the tunnel.

I agree with Certiorari that the differences between bankruptcy and trust deeds aren't significant for some people. This is especially the case for people that don't own assets. Trust deeds may offer more flexibility for those people that do own assets (like a home or car worth more than £3,000) which can be really important of course.

One major area of difference is people's perception of bankruptcy versus trust deeds. We did a member survey a few years ago which focussed in on questions such as this. The average perception about bankruptcy was far more negative than it was for trust deeds. Facts are facts (the differences aren't huge) but, for some people, their perception is reality. This can create a high barrier to choosing bankruptcy in the first place for some people.

It doesn't help that myths still go around about what voluntary bankruptcy entails. Attendance at court, newspaper publicity, a van clearing your house etc. We often hear these (factually unfounded) concerns from people when we discuss this option with them.

This is a trust deed forum, but I agree entirely that other debt solutions will work better for a lot of people. People are very welcome to discuss debt arrangement schemes, bankruptcy, and debt management plans here.

Hi TDA,

This was one of my questions, I had no idea what I needed to do to go through the bankruptcy process. I thought I would be sitting either in a court on in front a panel of people (like Dragons Den!) picking apart my finances.

When I spoke to David initially, he pretty much answered this line of questions before I even had to ask them, so I guess many people do believe this may happen which is doesn't!

There's a few TV programs (can't recall the names off hand) that have camera crews following the bailiffs around which doesn't help with the general fear factor for people in a situation like my own. I think the English bankruptcy system works differently to the Scottish one though?

2020 will certainly be a better year for my family as far as finances go. Mum and Dad will perhaps be "less grumpy" now!

AberdeenPhoenix

Being less grumpy at Christmas sounds like an excellent starting point AberdeenPhoenix!

English bankruptcy is a little different. The application fee is £680 which locks out even more people than the £200 fee in Scotland. On the plus side, any payment arrangement runs for 3 years rather than 4. Overall however the differences aren't enormous.

Those questions you had about bankruptcy are so common. The word "bankruptcy" is incredibly loaded for some people because of this.

AberdeenPhoenix did any of your mobile phone contracts get cancelled or anything ? My trust deed has failed to become protected due to creditor objections so I will be in your position in January time . I’m also in rented accommodation no assets but worried about everyday things like phone account.

Hi AberdeenPhoenix,

Thank you for deciding to share some very useful and encouraging information about your situation and decision on which option best suits your circumstances. Also thank you for the kind words and positive feedback.

I’m glad to hear that you may be a little less grumpy now! I think we can under estimate the impact that having debt has on our health and wellbeing and when you are in the thick of it you might not fully appreciate the impact it does have on you or the wider family.

When I meet with clients face to face from the start of the meeting to the end I can normally see a positive change in their body language and from an advisors perspective that’s where the job satisfaction comes from. Helping people who thought that there was no way out.

When it comes to debt and deciding which plan best suits your circumstances it’s important to reach out to someone that does all the options, Trust Deed, Sequestration and the Debt Arrangement Scheme. By doing that you can ensure that all the options are fully discussed and you can then make an informed choice. Trust Deeds are very popular but so is Bankruptcy too.

Very rarely does someone submit an enquiry to me looking for advice on Bankruptcy and normally when I bring this subject up they are a little hesitant. For many people there are not that many differences between entering into a Trust Deed or proceeding with a Bankruptcy.

People are always worried about court action, will they have to go to court, will it involve sheriff officers, could someone come round to their house and take their household possessions away under a Bankruptcy but this doesn’t really happen. Good old “Can’t Pay Take it Away and The Bailiffs” make our advice process a little tricky sometimes but it’s nice to reassure a client this won’t happen. All based south of the border. I think they should actually put a disclaimer at the end of those shows to say doesn’t apply in Scotland!!

Life in a Trust Deed is pretty much the same life in a Bankruptcy for the majority of people. It’s just taking that brave decision to proceed down the Bankruptcy route that can be off putting. A good advisor will be able to reassure you and guide you through this process.

1985debt – you can still have a bank account, still have a mobile phone contract. Nothing will change compared to the Trust Deed. It will be life as normal. You control your bank account, the payment of all of your bills etc. and all it will be is a payment per month to the Bankruptcy the same as it would have been in the Trust Deed.