Debt solutions in England, Wales and Northern Ireland are different to those in Scotland. This is because the legal legislation is different. This can mean people are searching for debt solutions which may not be possible for them because they don’t live in the country to qualify.

    For instance, an IVA is an English, Welsh and Northern Irish debt solution but people in Scotland cannot enter an IVA. However, there is a similar Scottish debt solution called a Protected Trust Deed.

    What is an IVA and Protected Trust Deed?

    An IVA and a Protected Trust Deed are insolvency solutions to help deal with debt problems. The solutions allow you to put an offer to your creditors where you agree to pay what you can afford each month for a period of time. If agreed by your creditors, you will repay an affordable amount and then the remaining debt will be written off at the end of the solution where you will be debt free. Your assets, like a house and car, are also considered and if you have equity then you may have to realise these.

    Scottish Debt Solutions

    A Protected Trust Deed is a popular debt solution for people living in Scotland with debt. While many people ask may search for an IVA, this doesn’t exist in Scotland. The trust deed enables a person to put an offer to their creditors to make one affordable monthly payment, usually for 4 years. At the end of the Protected Trust Deed people are debt free with typically 50% of their debt being written off. Only the amount which you can’t afford is able to be cleared.

    There are some negatives with the Protected Trust Deed, such as it will affect your credit file for 6 years and it can mean releasing equity out of your property (if you have equity and your house is mortgaged).

    What's the difference between an IVA and Protected Trust Deed

    There are some key differences between the IVA and Protected Trust Deed other than where a person lives and the law which governs the solution. For instance, some of the differences are:

    1. An IVA is a 5 year debt solution whereas the Protected Trust Deed is only 4 years.
    2. You can enter a joint IVA (for instance, a husband and wife), however the Scottish Trust Deed doesn’t allow this to happen and it would have to be two separate Trust Deeds (or one Trust Deed and another solution).
    3. In a Trust Deed you must repay 10% of the debt after fees. In an IVA you repay what you can afford and as long as it represents a better deal than bankruptcy it’s likely to be accepted.
    4. You require acceptance from your creditors, however the level of acceptance is different between the IVA and Protected Trust Deed.
    5. If you own a house or car the equity will be considered at the end of the IVA, however a Scottish Insolvency practitioner will usually consider the equity at the start of the solution.

    Deciding if a Protected Trust Deed is right for you will depend on your financial and personal situation. A qualified adviser at one of these charities can help explore what solutions are most applicable to you:

    StepChange: 0800 138 1111
    Debt Advice Foundation: 0800 043 40 50
    Citizens Advice Bureau: 0808 223 1133
    National Debtline: 0808 808 4000