Hi azh_ali and welcome to the trust deed forum.

A Scottish trust deed takes into account both disposable income and assets. Therefore it may not be a suitable option as the equity in the house will have to be dealt with one way or another.

As her share of the equity is worth more than the value of her debts any kind of insolvency, such as a trust deed, would be considered unnecessary. In simple terms, the home could be sold and the creditors could be paid back in full. There is therefore no reason for them to want to accept some debt being written off.

A possible option that would help is the Debt Arrangement Scheme as it would protect the property. For this to be viable your mother in law will need to have some disposable income that she can pay towards the debts each month. Therefore she will probably need to find new employment before this becomes an option.

In the interim it's important that she keeps her creditors informed about the circumstances behind her current repayment difficulties. I'd also suggest making "token payments" of, perhaps, ?ú1 per month each to demonstrate goodwill to her creditors pending such time that she is in a position to put together a more concrete plan.

Thank you for quick response. I will inform her about the options.

Just a another question. Her share of the equity is more than her debts but property is joint owned and what happens if her hushband is not willing to sell it as this will mean he will loose equity in quick sale?

Can hushband buy her share for small amount to save the property and then she enters into trust deed? But i feel that could count as fraud, is that right?

Hi azh ali

The Trustee has a right to raise an action of division and sale to force the sale, if her husband objects Although extreme, it is possible.

She is unable to sell at undervalue or transfer in a 5 year period as this sale/transfer can be cut down by the Trustee with an Action of Reduction.

Mark