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Trust Deeds

Trust Deeds are only available in Scotland.***

Protected Trust Deed

A Protected Trust Deed in Scotland is a legally binding arrangement between a person and their lenders, usually lasting for a duration of 4 years, although a longer period can be considered depending on your circumstances.

A Trust Deed can only be carried out through a licensed Insolvency Practitioner (IP) who will then act as the Trustee.

This form of debt solution is only available to residents of Scotland and is designed to provide debt help individuals who are unable to repay their debts (more than £5,000) over a period of time. At the end of the period any remaining debt not paid of over this time, is usually written off by creditors.

What Is a Trust Deed?

A trust deed is a mutually consensual agreement between you and the people you owe money to. You agree to pay a regular amount of money towards your debts and at the end of a fixed time the rest of your debts will be written off.

All your belongings and property (assets) are given to someone who will look after your financial affairs. They are called your trustee. The trustee aims to pay your creditors as much as possible of the debt owed to them. This may involve the sale of some of your assets so that the money raised can be paid to your creditors.

A trust deed can become ‘protected’ if most of your lenders are happy with the terms of the trust deed. This means that the trust deed is compulsory on all creditors and they cannot take any steps to recover their money.

If a trust deed is not ‘protected’, it will not be binding on all of your lenders and they could still take action to recover the money owed to them.

A trust deed is one of the debt solutions available to you if you have debt problems. Our team of friendly expert advisors are on hand to run through your circumstances, explain your options and help you get on top of your debt problems.

Am I Eligible for A Trust Deed?

To be eligible for a Trust Deed, you need to be a resident in Scotland, have assets and be able to make payments in the schedule set out and agreed with the creditors and trustee.

  • Debt level – £5,000 or more
  • Able to make regular payments – you have enough money to make a regular contribution towards your debts
  • Belongings and property – you have belongings and property (assets) such as savings, investments, a car or a house

Advantages of Trust Deeds

The advantages of protected trust deeds are:

  • No more contact from your creditors (Who you owe money to) – Your trustee will handle all communications with your creditors, relieving the stress of doing this yourself
  • No more enforcement action – if you are thinking of setting up a trust deed, you can apply to the Accountant in Bankruptcy to stop your creditors taking any steps to recover the money you owe them
  • You are not barred from certain types of employment or public office as you would be under bankruptcy (Sequestration in Scotland)
  • You are not barred from certain types of employment or public office as you would be under bankruptcy (Sequestration in Scotland)
  • Borrowing money – you are not legally stopped from borrowing money (obtaining credit) like a mortgage or a credit card, although this may be difficult to get in practice due to credit scores
  • Debts wiped out – your trust deed will usually come to an end after 4 years (called discharge). Most of your debts will be wiped out and you will not have to pay them back.

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