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.
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.
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.
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).
The benefits of using a Trust Deed to solve your personal debt problems include -
There are however some disadvantages and drawbacks that should be considered -
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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