A Protected Trust Deed is a debt solution for people living in
Scotland and is an alternative to Sequestration. The Scottish Trust
Deed helps people manage their debt and pay one affordable
payment each month, until the solution is finished.
Our charity debt advice team can help you understand if
you would qualify for this Scotland-only debt solution.
Please call 0800 085 0226 or complete our
debt analyser below for immediate assistance.
Protected Trust Deeds Scotland
A Protected Trust Deed (Scotland) is a legally binding solution.
A proposal is put to your creditors on your behalf by a licensed
insolvency practitioner (IP). The proposal is an agreement by you
to make an affordable monthly payment towards your debt for
typically 4 years. In return you will only repay what you can
afford. Any remaining debt will be cleared at the end of the
solution, as long as you comply with the terms and conditions of
the debt solution.
Any remaining debt after the debt plan has concluded will be
cleared and you will be debt free. This relates to unsecured debt
only. You will need to maintain payments to any secured debts, such
as a mortgage. Click here for further information on debt advice in
Get Help With A Scottish Trust Deed
You can get immediate help from a debt advice
charity by telephoning 0800 085 0226.
Alternatively, complete our debt analyser form and request a call
back for immediate debt help.
Benefits of a Trust Deed in
- You only make one monthly payment to your debt
- Your interest and charges will be frozen. However if your
Protected Trust Deed in Scotland fails at any stage, or you receive
a windfall (such as winning the lottery etc), you will be required
to repay interest and charges too
- You will not have to liaise with your creditors as the
insolvency company will do this on your behalf
- Once the solution is signed and protected both you and your
creditors are legally bound by the agreement, which means if you
complete the agreement you will be debt free having only repaid a
proportion of the money borrowed
- If you are a homeowner you may be able to retain your property,
the IP will only be interested in any available equity
- In the future you are likely to face fewer credit restrictions
than if you entered Sequestration
Negatives of a
Protected Trust Deed Scotland
- If there is any available equity within your property this may
have to be included in your proposal
- The debt solution may adversely affect your credit rating
- Your employment contract may not allow you to enter a Trust
Deed - you would need to check this
- If you enter the debt solution and do not meet the terms of the
agreement you are likely to face Sequestration
- Your income and expenditure will be reviewed regularly and your
monthly payments may fluctuate up as well as down
- A remortgage is likely to be on less favourable terms and if
you are unable to gain a remortgage your debt solution may be
extended for up to 12 months
- The default applied will affect your credit rating for six
Criteria for a
Trust Deed Scotland
- Must be able to make a monthly
contribution to your debts of at least £50
- Your unsecured debt must be £5,000
- You must be able to repay at least
10% of the money borrowed over the course of the solution to your
Fees associated with a Trust Deed
A Trustee is required to setup and administer your debt
solution. The Trustee will be a licensed insolvency practitioner.
The debt solution will have fees and charges attached. The fees and
charges for your Trust Deed will be made from the money you pay
into your debt solution each month. The fees cover
- Drafting and administrating the proposal
- Corresponding with your creditors
- Ensuring your monthly contributions are distributed to your
creditors and any other assets are dealt with
- Periodic reporting to creditors and the Accountant in
- Dealing with any other issues or concerns during the course of
the Scottish debt solution.
Different insolvency companies will charge varying levels of
fees depending on their company policy and the complexity of your
case. There will be a nominee fee to propose your case then a
supervisory fee for managing your case through to the end.
If your debt solution were to fail you would be liable for
repayment to your creditors. You may also face Sequestration.