Protected Trust Deeds in Scotland
A Protected Trust Deed is an agreement made between you, your creditors, and a qualified Insolvency Practitioner, who is referred to as the “Trustee”. Once a Trust Deed is signed, your Trustee will take over dealing with your creditors; which means that you shouldn’t get any more phone calls from the credit card company, or letters from your bank. You will pay an agreed amount to your Trustee, usually on a monthly basis, based on what you can actually afford. The Trust Deed will usually run for three years, after which you to become debt free.
- Lasts for three years
- Pay back what you can afford over three years, then the rest of your debt is written off.
- You can usually keep your home and car
- Stops creditors phoning and writing to you.
- You can be self employed
Under a Trust Deed, your home and car need not be affected. Your Trustee will require a valuation of your property to check if you have any equity in your home. We will work with you to ensure that your home is protected. Your employer and family will not be told about the Trust Deed. If you own a car and need the car for work, your trustee will allow you to keep the car. Your trustee will consider how much your car is worth.
When you sign a Trust Deed it is advertised in the Edinburgh Gazette, which is a publication in which all insolvency's in Scotland have to be advertised After your Trust Deed is advertised creditors, have a five week period to accept or reject your Trust Deed proposal. If the majority of your creditors, which is either half in number or a third in value (in value means the creditor who you owe the most money to) object, your Trust Deed will fail and you can apply for bankruptcy. This is normally done with the same Insolvency Practitioner who signed your Trust Deed, ensuring your case is dealt with in the same way. If your creditors accept your Trust Deed proposal it become protected.
A Trust Deed is often the ideal solution, particularly if you have debt over £10,000, or have your own home. However, it is important that you obtain expert advice, as the Trust Deed isn’t the best route for everyone. Many of us will have received cold calls from companies who talk of Trust Deeds as a miracle answer to debt problems, usually talking about “new government legislation” or having your debt “wiped clear” within three years. At Independent Debt Solutions, we will only suggest a Trust Deed if it is best for you. We only work with experienced Insolvency Practitioners, ensuring that you are protected at all times.
It is important to remember that the Trust Deed is a legal agreement with your Trustee. If you fail to meet the agreed repayments, then you could be made bankrupt or your house could be at risk. A Trust Deed will affect your credit rating, making it more difficult to obtain credit.
- Your credit file will be effected
- If you have equity in your home this will have be made available to your trustee
- Whilst we do not charge fees your trustee will take a fee from the amount you pay
- The Insolvency company who is your trustee will charge on average £5500 including the trustee outlays over three years, this comes off your agreed monthly contributions.
- If the majority of your creditors object your trust deed will fail and you will be made bankrupt
- Failure to maintain your agreed contributions can lead to bankruptcy and your home may be at risk
- Restrictions be in placed on your expenditure whilst allowing you a reasonable lifestyle.
- If you fail to inform your trustee of any unsecured debt when you sign your Trust Deed they are not included and you will be liable for these debts.
At Independent Debt Solutions we are here to answer any questions that you have or deal with any problems. We aren’t a call centre. When you contact us, you will always be able to speak to the same advisor. Our clients are important to us, so we take the time to understand your situation and help you find the solution best for you.