Hi vixenmixen1971 and welcome to the forum.

It's theoretically possible for a trustee to present trust deed proposals to creditors that explicitly exclude any equity in a family home.

On a commercial level, it's difficult to understand why any creditor would consent to this so the process is (to the best of my knowledge) very rarely used.

Vixen

That is a very good question and unfortunately usually involves a very technical response.

For a trust deed to achieve protected status there is certain requirements that need to be satisfied. For example, all assets must be conveyed to the trustee as part of the trust deed agreement.

There is the possibility that the main place of residence can be excluded from the process if the secured lender agrees to do so.
It would only be applicable for main dwelling house where there is a mortgage / security in place and the secured lender must agree to renounce their right to claim against the trust deed and will not be able to vote in the process.

It was first introduced under the Home Owner and Debtor Protection Scotland Act 2010.

In practice, there has been very few of these trust deeds granted for a number of reasons. The main one being is that creditors may object to the trust deed as they would be disadvantaged from not receiving a dividend payment in terms of equity payments.

From experience, it is highly unlikely a secured lender legal agent would recommend to their client to agree to excluding themselves from the process.

Hope this helps.