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Trust Deeds (SCOTLAND ONLY)
Trust Deeds aim to achieve the same result as an IVA, but work in a slightly different way.
Monthly payments are calculated on what you can afford and a completion of a Trust Deed signals the end of the debt.
What is a Trust Deed?
A Trust deed is a legal agreement, implemented when an individual is unable to make full monthly payments to the creditors, except in this case the Insolvency Practitioner is known as The Trustee. The trustee makes a proposal to the lenders, having fully studied the debtor’s finances and, upon acceptance, the legal deed begins. The usual period for a Trust deed is typically 36 months.
A feature of a Trust Deed is the ability to have it registered as protected with the Courts, providing all conditions are met. This prevents legal action against you and freezes interest on your debts.
The criteria
All Trust Deeds must relate to one applicant even if you are married or in a civil partnership.
- The minimum debt level is £10,000
- You must have been in permanent employment for 6 months
- You must have been a resident of Scotland for at least 6 months
- You must be 62 years old or less
Once up and running with a Trust Deed, you will need to notify the Trustee if you receive any unexpected windfalls in excess of £200.
The Advantages
- A Trust Deed is more flexible, and costs less than Sequestration (bankruptcy)
- Your Professional Status is unaffected
- You can Hold Public Office
- Information on your Trust Deed is not published in local papers
Please remember that you are entering into a legal contract to repay your debts and must co-operate with The Trustee by making monthly contributions and not taking out further credit.