Not many people know what a Trust Deed Scotland is, so let’s find out. A protected trust deed is a legal solution for those of you who are struggling with unsecured debt.
However, this is only available for people who live in Scotland, so if you’re in need of this type of solution and you’re from England or Wales, an Individual Voluntary Arrangement (IVA) or Debt Management Plan (DMP) is what you’re looking for.
A Trust Deed is what you choose instead of the Debt Arrangement Scheme (DAS) or Sequestration (Bankruptcy) in Scotland. It actually is an agreement between you and an IP (Insolvency Practitioner). The monthly payments are made over four years or longer. Also, keep in mind that any interest or fees are frozen at the date of commencement and that creditors should not contact you anymore. And, if you’re sticking to the terms of this agreement, they won’t be able to take any legal action against you for recovery of their money.
About the Trust Deed Eligibility
To be able to get this, you need to meet some criteria:
You need to live in Scotland, or, at least, you need to prove that you had lived here within the 12 months. Also, having a workplace in Scotland is also helpful. You need to have unsecured debt of £5,000 or even more and you need to be insolvent (meaning that you are unable to pay the debt as they fall because of their liabilities, which are greater than your assets).
About the whole process
After you get an IP that you trust, he will discuss with you about your situation and will talk to you about your options. If you choose to go with a Trust Deed, they will speak to you about a monthly payment that works for you. After you discuss all the details, you will sign the official documents. Next, it comes the Trust Deed proposal – your IP will make a plan to your creditors.
They will talk to them about your income and your asset position and will tell them about the monthly payments. After this, the Trust Deed is advertised on the Register of Insolvencies. Then, the creditors are going to send the proposal in about seven days.
Now the creditors need to decide on this: if they decide on less than one-third of the total debt, or less than the majority in number object of the proposal, then the Trust Deed gets protected status. If they don’t respond, they have to agree to the proposal.
In 5 weeks, creditors will conform to the proposal and you will be registered as protected, meaning that they won’t be able to take legal action against you to recover the debt or interest – your debt is frozen starting from the date of the official contract.