Trust Deeds are for Scottish residents only. If you live in England, Wales or Northern Ireland, please refer to IVAs.
Often referred to as the Scottish IVA, a Trust Deed is available only in Scotland. It offers an alternative to sequestration, the Scottish equivalent of Bankruptcy.
For people who live in Scotland, who would otherwise qualify for an IVA, we can advise them on the suitability of a Trust Deed.
A Trust Deed is a voluntary but formal arrangement available to Scottish residents who are unable to meet their monthly creditor commitments. The debts are condensed into one affordable payment, usually for 36 months, after which any remainder is written off.
As with every debt solution, the right advice is essential as it should be the most beneficial option to your situation. Here are some other benefits a Trust deed can offer:
A Trust Deed can reduce debt by up to 90%
You only pay what you can realistically afford after your circumstances are taken into account. Everyone’s circumstances are different and we work with that in mind.
A Trust Deed will get you debt free in 3 Years
Trust deeds usually last for 36 months, after which time the remaining debt is totally written off.
A Trust Deed freezes interest and charges
You will stop paying interest and charges once your Trust Deed has been approved.
A Trust Deed stops harassing calls and letters
Creditors and debt collectors will no longer be allowed to pursue you for payments once a protected trust deed is in place (see below).
A Trust Deed avoids sequestration
A Trust deed means you have reached a formal agreement with your creditors to make payments you can realistically afford. This means you are spared from sequestration. Sequestration means you would lose control of all of you assets, including your home which may have to be sold.
Protected Trust Deeds
There are two types of Trust Deed.
- The Trust Deed – often referred to as an unprotected trust deed.
- The Protected Trust Deed (PTD).
Ideally you'd want a protected trust deed. The main advantages of a protected trust deed are that the creditors cannot force you to go through sequestration nor can they pursue you for payments on monies owed, or on debts included within the PTD.
Making a Trust Deed protected
In order for your trust deed to become protected there are certain procedures to be followed. The trustee will advertise your proposal in the Edinburgh gazette and write to your creditors individually to advise them of your intention to protect your trust deed. The creditors have five weeks from publication of the notice to object to your proposal. Your Trust Deed will become protected automatically unless your trustee receives objections from the creditors. The objections must represent:
- 50% or more of your creditors in number.
- More than 33% of your creditors by value of the total debt outstanding.
It's not common to receive such high levels of objection. Once the Trust Deed is protected it becomes unlawful for the creditors to pursue you to recover the debts outstanding. However this will cease to be the case should you default on the Trust Deed.