Trust Deeds

Trust Deeds are available to individuals, sole traders and business partners, Domicile in Scotland who are Insolvent and experiencing unaffordable debt repayment problems.

Trust Deed Criteria

There is no pre-determined level of debt, or minimum payments required to allow a trust deed to proceed.  Every trust deed proposal is specific to individual circumstances and being the appropriate advice. In practical terms, the minimum level of debt we would advise a trust deed is £5,000.

What is a Trust Deed.

• A trust deed is only available in Scotland and is the equivalent to the English IVA. It is a legally binding agreement between your client and their creditors to pay a fixed sum each month to their creditors.
• This solution allows for a negotiation between an appointed Insolvency Practitioner and your client's creditors to reduce the over all debt figure and come to an arrangement on a reduced fixed monthly repayment.
• The trust deed is a form of informal sequestration (term used for bankruptcy in Scotland) and is regulated by The Scotland Bankruptcy Act 1985
• The duration for a trust deed is usually 3 years.
• If certain criteria is adhered to, the trust deed can be registered as 'protected'. This means that creditors are unable to take legal action against your client and prevents them for adding any further interest to the debt.

Benefits For Your Client

• An amount of debt can be written off depending on personal circumstances.
• Reduces the stress and pressure of phone calls from the creditors.
• Allows for better control of maintaining assets such as your client's home.
• Debt freedom in 3 years.
• Creditors are unable to proceed with further action against your client to reclaim the debt.
• A trust deed compared to sequestration is cheaper to administer and will potentially cost your client less in the long run.

Points to consider before entering into a Trust Deed

• Debtors within a trust deed are prohibited from being a director of a limited company.
• If your client owns a home they may be forced to sell if they are unable to source funds from elsewhere.
• The arrangement is a legally binding agreement between your client and their creditors.
• If your clients does not maintain commitments in the trust deed, the Insolvency Practitioner can petition for their sequestration.