New changes to the way Scottish Trust Deeds are administered have been introduced for people with debt problems. For people thinking of entering a Trust Deed in Scotland, there’s good and bad news.

The role of the AiB in Scottish Trust Deeds

The Accountant in Bankruptcy is a supervisory body which monitors the Trust Deeds registered in Scotland. The Accountant in Bankruptcy has been working to change how Protected Trust Deeds are administered.

The changes have meant the length of time a Trust Deed lasts is often extended. Who can enter a Trust Deed and how much unsecured debt is outstanding has changed too.

So, what are the Trust Deed changes?

We mentioned in September about the impending changes to Trust Deeds but there have also been some extra surprises.

We expected that Trust Deeds would move from a 3 year to a 4 year debt solution. This excludes people who are entering an equity only or lump sum Trust Deed. Protected Trust Deeds will now be assessed on the Common Financial Statement too.

The AiB will have more powers to reject Protected Trust Deeds which are not in the best interests of the person in debt. A 4 year Trust Deed, when a 4 year debt arrangement scheme would be more suitable, for example, would mean the trust deed would be rejected by the AiB, even if the creditors said yes.

Trust Deeds in Scotland are advertised in the Edinburgh Gazette, however the changes mean there is no need to advertise the Trust Deed any longer. Instead, a person entering the Scottish debt solution will automatically be listed in the Register of Insolvencies (ROI). This debt advice Scotland solution is only applicable if you’ve been in Scotland for the past 6 months.

The fees for the Insolvency Practitioners will change too. An Insolvency Practitioner will have to work on a nominee fee and then a supervisory fee. The supervisory fee will mean they will receive a percentage of what’s recouped, instead of a flat fee. This should mean the creditors get more of the money back.

I’m in a Scottish Trust Deed, what will happen?

If you’re already in a Trust Deed you don’t have to worry about the recent changes, as it’s only impacting people moving forward.

Anybody entering a Trust Deed from today onwards will be in the solution for 4 years, instead of 3. However, it’s not all bad news as people can enter a Trust Deed if they have £5,000 of unsecured debt or more, instead of the typical £10,000.

The changes to Scottish Trust Deeds is an interesting development and certain to allow increasing numbers to enter a solution to resolve debt problems. There are also other debt solutions for people in debt, such as a debt arrangement scheme or sequestration.

We help people in debt across the whole of the UK with telephone and internet based support. For debt help from Debt Support Trust please call 0800 085 0226.