The rule that decides it is the conveyance formula. A trust deed hands over exactly what a Scottish bankruptcy would take, and what a protected trust deed is sets out the arrangement as a whole.

This page also covers savings, life policies and the bank account, because they run on the same formula. Where the published sources stop, it says so.

A vehicle whose use you reasonably require and which does not exceed £1,000 in value. Both tests have to be met, and the chain that gets you there runs through three provisions.

The chain, in three steps

Section 167(1)(a) and the definition of a trust deed at section 228(1) convey your estate other than property that would not vest in a trustee were your estate sequestrated.

Section 88(1)(a) then excludes from vesting property kept outside a dwellinghouse in respect of which attachment is incompetent by virtue of section 11(1) of the Debt Arrangement and Attachment (Scotland) Act 2002.

And section 11(1)(b) of that 2002 Act makes attachment incompetent for any vehicle, the use of which is so reasonably required by the debtor, not exceeding in value £1,000.

A car on a driveway or in the street is kept outside a dwellinghouse. That is why the vehicle line runs through the attachment rules rather than through Part 14.

What else the same exemptions cover

Those are the same items sheriff officers cannot attach, and which belongings are protected from sheriff officers covers them from the diligence side.

From a different test entirely. Section 2(3)(b) of the Bankruptcy (Scotland) Act 2016 disregards a reasonably required vehicle worth up to £3,000, and its opening words are “For the purposes of subsection (2)(c) and (d)”.

What subsection (2)(c) and (d) are

They are the Minimal Asset Process eligibility conditions: the £2,000 total asset test and the £1,000 single asset test. Section 2(3)(b) is a disregard for working out whether you qualify for that route into bankruptcy.

It says nothing about what vests in anybody. What Minimal Asset Process bankruptcy is explains the conditions the figure actually belongs to.

The two figures side by side

The 2002 Act figure is unamended. Section 11 on legislation.gov.uk is shown as up to date with all changes in force on or before 29 August 2026, and the power in section 11(2) to prescribe a different amount has not been exercised.

Which does not make the £3,000 a fiction

AiB states £3,000 in more than one publication and trustees follow it. AiB’s own wording in its guide for debtors is that you may be able to keep a reasonably required vehicle at that value, and “may be able to” is doing the work.

So treat £3,000 as practice and £1,000 as law. Ask your trustee in writing which figure they are applying to your vehicle.

It is very likely to be left with you, and there is a practical reason as well as a guidance one. A trustee is not obliged to realise every asset that vests, and selling the car that gets you to work destroys the income the contribution depends on.

The cost-effectiveness point

AiB’s guidance carries a cost-effectiveness qualification on realising assets. A modest car with a resale value that would barely cover the costs of selling it is not worth the trustee’s time.

That is a reason to expect a sensible answer, not a guarantee of one. The decision is the trustee’s and it is made on your figures.

The reasonably required test is half the answer

• Travel to and from work where public transport is not a realistic substitute.
• Caring responsibilities, school runs and hospital appointments.
• Health or mobility needs that make public transport impractical.
• Rural or shift-pattern travel where services do not run at the hours you work.

Write those reasons down and hand them over at the first meeting. AiB expects advisers to document why a vehicle is necessary, and it is far easier to establish at the outset than to argue later.

What you must never do

Every asset has to be disclosed whether or not the trustee intends to realise it. AiB warns that deliberate misinformation or non-disclosure of assets may constitute a common law offence.

Above the exempt value the vehicle is part of the estate and its value has to be accounted for to creditors. A car on hire purchase or a personal contract purchase is not yours outright, so the outcome turns on the agreement.

A car you own outright and cannot exempt

In practice that means selling and replacing it with something cheaper, or a third party paying the trustee an amount reflecting the value. Changing the car before you sign is a conversation to have with an adviser, not something to do quietly.

Where somebody else pays, the trustee has to tell creditors, say whether the arrangement is legally binding, warn that non-contractual payments cannot be guaranteed, and name the payer. Trustees should not accept payments from someone who is in a debt solution of their own.

A car on hire purchase or PCP

This is where general articles are least reliable, because the terms differ and the finance company has its own position. Give your trustee the agreement itself before you sign anything.

• Is it hire purchase, a personal contract purchase, or an unsecured loan you used to buy the car outright?
• If the payments continue, will they be allowed as expenditure in the assessment?
• What does the agreement say about insolvency, and has the finance company been asked?
• If the car goes back, what replaces it, and what does that do to your travel costs?

That last one is not a side issue. Travel is one of the categories the assessment measures, and how trust deed monthly payments are calculated shows how a change in travel costs feeds through to the monthly figure.

A vehicle you get after signing

Section 167(1)(b) binds you to convey estate acquired in the four years beginning with the date the deed is granted, if it would have been conveyed had you owned it that day.

So a car inherited or won in that window is treated on the same rules. It does not mean you cannot replace a car, only that you tell the trustee before you do it.

They are conveyed to the trustee. Savings are estate, nothing found excludes money in an account from vesting on sequestration, and a trust deed takes what a sequestration would take.

Money you have on the day you sign

The formula at section 228(1) is the same one that protects the pension and the modest car, and it does not reach a credit balance. A savings balance held at the date of granting forms part of what is conveyed.

Money you put aside afterwards

Savings built up during the deed are caught by the four-year acquirenda clause in section 167(1)(b). That is the same provision that catches an inheritance or a windfall.

It is not a reason to avoid saving, and the assessment itself allows a small contingency amount. How trust deed monthly payments are calculated gives the figure and where it comes from.

The figure that does not apply

You will find a £1,000 life policy surrender value quoted in trust deed content. That is a Minimal Asset Process bankruptcy eligibility threshold and it is not a trust deed rule.

There is no protected savings figure in a protected trust deed. Any number you are shown should be traced back to the provision it comes from before you rely on it.

The published sources do not settle either question at the level of detail people want. What they do settle is that everything must be disclosed and that no trust deed specific rule for savings, endowments or life policies has been verified.

What can be said about policies

AiB’s Common Financial Tool guidance requires documentary evidence of every policy you hold, and treats maintaining a policy as acceptable where it is relevant and not excessive. AiB’s guidance for trustees also requires the trustee to explain to creditors why any asset will not be fully realised.

Advising you to change your cover sits outside a money adviser’s scope, so expect a referral rather than a recommendation. How a particular policy is treated is a question for your trustee in writing.

What can be said about the account

Nothing in Part 14 addresses the bank account you use day to day, and no rule about it was established in the sources behind this page. Anyone stating one confidently is going beyond the published material.

Raise it with the trustee before you sign rather than after. Ask which account your wages and your contribution should run through, and get the answer in writing.

One protection that does not help here

There is a rule that no contribution is due where a debtor’s income is solely from social security benefits and tax credits. That is a rule about income and it does not protect capital sitting in an account.

Keep the two apart when you read about this. What a bank arrestment is in Scotland deals with the separate question of a creditor freezing an account.

Get the vehicle valued, get the finance agreement in front of the trustee, and put every account and policy on the list. Section 167(3) gives you the time to do it.

The checklist

The time the Act gives you

Your trustee must give you a debt advice and information package and a trust deed information document, advise you on the consequences, and allow you adequate time to consider it. Scottish Ministers’ guidance sets that at a minimum of three clear days.

If the car is the sticking point

It is worth comparing the routes on your actual figures rather than in the abstract. Which debt solution is best if you have a wage arrestment sets a trust deed against the Debt Arrangement Scheme and the bankruptcy routes.

The Debt Arrangement Scheme does not convey your estate to anyone, which changes the asset question completely. Our Debt Arrangement Scheme page sets out how it works.