Trust Deeds ( Scotland Only)

The law that applies to debts in Scotland is a little different to the law that applies in England and Wales. Here the Scottish equivalent of an IVA (Individual Voluntary Arrangement) is known as a Trust Deed.

What is a Trust Deed?

Trust Deeds are a formal arrangement for residents in Scotland to help them restructure their unsecured personal debts and pay back an affordable amount each month for a fixed period of time. Typically they will last for three years (36 months) at the end of which any remaining unpaid debt is written off.

How do Scottish Trust Deeds work?

In a Trust Deed your debts are consolidated so that instead of managing your debts separately you make one single payment each month. Types of debt that can be included in the arrangement include credit and store cards, overdrafts and unsecured loans.

The amount you pay is based on an assessment of your income, assets, essential living expenses and what you can reasonably be expected to be able to afford. This helps to ensure that you are able to keep up with the payments for the duration of the agreement.

To qualify you should be a Scottish resident and have debts of at least £6000 that you can no longer afford to pay. You will also need to have a regular income.

How does a Trust Deed become a Protected Trust Deed?

The Trust Deed will automatically become protected unless a majority in number, or not less than one-third in value of creditors objects in writing, within five weeks of publication of a Statutory Notice in the Edinburgh Gazette. Creditors who have not objected are treated as agreeing. Objecting creditors are treated as non-acceding creditors (this gives them some limited rights to apply to the court for sequestration if they can show unfair treatment).

What are the advantages and disadvantages of Trust Deeds?

The benefits of using a Trust Deed to solve your personal debt problems include -

  • You make one affordable payment each month
  • A percentage of your debt will be written off
  • They last for a fixed period of time and so you will know exactly when you will become debt free
  • Interest and charges on your debts will be stopped

There are however some disadvantages and drawbacks that should be considered -

  • It will damage your credit rating and remain on your credit file for six years
  • They are legally binding and so you are committed to the terms of the arrangement
  • You may lose some of your assets
  • Until the Trust Deed becomes protected your creditors will still be able to chase you for payments

Trust Deeds Scotland - Information and Advice

For advice on Protected Trust Deeds call us today on 0800 028 4422 or simply fill in our enquiry form we will call you.

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