Trust Deeds | Scottish | Trust Deed | Debt Advice | Scotland

What is a Trust Deed (Scotland)?

A Trust Deed (also known as the Scottish equivalent to an IVA) is a formal debt solution between you and your creditors where you pay back only the percentage of your debts that you can afford and the rest is written off. It is seen as a good alternative to Sequestration.
A Trust Deed normally lasts for three years and at the end of this period, any unpaid debts are written off.

A Trust Deed is a formal agreement and when it is protected it becomes legally binding for all your creditors involved. The terms and conditions of the agreement are tailored to suit your individual circumstances and what you can afford to pay each month. If your creditors agree to the terms of the Trust Deed it will become protected and legally binding.

Advantages of a Trust Deed

1 easily affordable monthly payment based on your income and expenses.
Unlike some of our competitors, we do not charge upfront fees; saving you £100's.
A Trust Deed offers you protection from creditors.
Creditor pressure is stopped as creditors will have to deal with issues through us.
A Trust Deed can be complete in as little as 1 year if you can offer a lump sum payment.
All interest is frozen immediately.
A Trust Deed is suitable for tenants or homeowners, individuals or couples and even businesses owners.
We can set up a Trust Deed in as little as 4 weeks.

IVA Disadvantages

If you are a homeowner with equity in your property you may be required to introduce part of your share of this equity in the final year of the arrangement. If you can’t get a remortgage your arrangement can be extended for up to another year.
If your circumstances change, and your insolvency practitioner can’t get creditors to accept amended terms, the Trust Deed is likely to fail. You will still owe your creditors the full amount of what you owed them at the start, less whatever has been paid to them under your rust Deed.
If your Trust Deed fails, your creditors may request that you be made bankrupt. This will always be discussed before your arrangement commences
Your credit rating may be impacted for up to 3 years from the commencement of your Trust Deed.

If you are thinking about entering into a Trust Deed, contact us at Debt Advice.

How to set up a Trust Deed

In order to set up a Trust Deed you need to first find out if you meet the basic criteria. You can contact us for advice on this. Once you know you do meet the criteria an Insolvency Practitioner (IP) must oversee your case. You cannot do a Trust Deed without an IP. Their job is to advise and assist you and put your Trust Deed proposal to your creditors. They must remain fair and at all times, have you and your creditors interests at heart. So assuming that a Trust Deed is your best way forward you would:

Contact us at Debt Advice. We will run through your situation with you and prepare a list of your creditors, income, outgoings etc... This will enable us to come up with your new monthly affordable payment. With your approval we will put the proposal through to your creditors. Your creditors will have 5 weeks to notify the trustee of any objections in the proposal. Should the trustee not recieve any significant numbers of objections, then your Trust Deed becomes Protected and you will be debt free in 36 months.

Is a Trust Deed right for me?

A Trust Deed is right for you if:

You are a resident of Scotland
Your debts are too high and unmanageable and the problem is getting progressively worse.
Your creditors are putting too much pressure on you to pay back your debts that you can't afford to pay
It's going to take an exceptionally long time to pay your debts back