In the event that you find yourself unable to meet repayments to your creditors, you can apply for a Trust Deed. You will be required to disclose your financial details (including details of all creditors and how much you feel you can pay per month) to a licensed Insolvency Practitioner. They will act as Trustee and will collate the information provided and use it to build a proposal which will be submitted to your lenders for approval. The Trustee will negotiate on your behalf and any monies owed that remain after you have met your agreed monthly payments will be written off. In addition to this, providing you meet certain conditions, your Trust deed may be 'protected'; this means that lenders are obligated to accept the monies recovered as full and final settlement of the outstanding amount and are not permitted to add further interest or take legal action against you.

Although a Trust Deed is a form of 'informal' bankruptcy (and as such is regulated by the Bankruptcy (Scotland) Act 1985), it has many advantages including;

• It allows more flexibility and costs less to administer than bankruptcy
• Interest and charges are frozen on all applicable debts
• The Trustee handles all correspondence with your lenders
• You can write off a substantial percentage of your overall debt
• You are more likely to be able to continue self-employment/directorships
• The information in not made public (unlike bankruptcy)