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Trust Deed Scotland - We do not charge a set up fee

Available to residents in Scotland - formal legal solution to deal with unmanageable personal debt.

The Protected Trust Deed is offered only in Scotland as is similar to the IVA (Individual Voluntary Arrangement). It is a legally governed procedure by which you can repay your debt over a specified period of time – usually 36 months. Monthly payments are based on what you can afford and provided you have included all unsecured creditors in your Scottish Trust Deed, have not taken on further debt, and have met your commitments to the Scottish Trust Deed you will be completely debt free of unsecured debt at the end of the Scottish Trust Deed. Please note that Trust Deeds do not include secured debts such as mortgages or hire purchase agreements.

For clients in Scotland, where a Protected Trust Deed (PTD) is agreed to be the best debt solution for you then we will refer you directly to our chosen licensed Insolvency Practitioner.

The Protected Trust Deed Process

The first part in the process of entering into a Protected Trust Deed is to compile a full list of creditors (people you owe money to), how much you owe, and what you can afford to pay each month.

The trustee will put together a form of proposals to the lenders for approval and administer the Protected Trust Deed. The Trust Deed may be registered as a Protected Trust Deed. This prevents lenders from taking legal action against you and ensures that interest will be frozen on your debt. The Protected Trust Deed is granted if two thirds or more of your creditors by value agree to it.

A Trust Deed is often selected by homeowners in preference to bankruptcy which can often lead to the loss of a home. At DebtFC we strongly recommend that any homeowner gets written clarification as to how any equity in their home will be dealt with prior to signing a Trust Deed.

Entering into a Protected Trust Deed means that you are entering into a contract to repay your debt, usually at a reduced rate. As such, you agree during the term of the Trust Deed to:

  • Pay the agreed monthly contribution.
  • Not take any further credit.
  • Advise the trustee should you receive any unexpected windfalls or your financial circumstances change.

Advantages of a Protected Trust Deed

  • The trustee handles all correspondence from creditors, therefore relieving the pressure of debt.
  • A Protected Trust Deed is usually more flexible and costs less to administer than sequestration (bankruptcy).
  • With a Protected Trust Deed, your creditors will be unable to add further interest, charges, or take any further action against you.
  • You will in most cases still be able to hold certain public offices.
  • You will in most cases still be able to remain self-employed and continue to serve as a director of a company.
  • Protected Trust Deeds normally last 3 years, after which any remaining debt will effectively be written off.
  • Information about the Protected Trust Deed is not published in local newspapers unlike sequestration (bankruptcy).

Disadvantages of a Trust Deed

  • Existing arrestments and other diligence continue to be effective. It should be noted that Councils who carry out earnings arrestments will generally lift arrestments upon protection of the Trust Deed.
  • You cannot be a company director of a limited company unless the company’s Article of Association state otherwise.
  • The arrangement is binding on you as well as your creditors. If you were to default on the arrangement then the Insolvency Practitioner can petition for your Sequestration (bankruptcy).
  • Entering into any arrangement with your creditors will affect your credit rating.
  • Creditors are not obliged to accept a proposal for a Trust Deed. However, the Trustee will negotiate with all your creditors. Unless creditors, who are owed more than one third of the total debt object, the Trust Deed will become protected.
  • If your trust deed fails, you remain liable for your debts and your creditors will be able to pursue you for repayment.

Trust Deed Fees

Upon entering into a Trust Deed agreement, the only payments you will be required to make are your monthly payments, as set out in the Trust Deed, for the benefit of your creditors. No other payments are required.

You will be charged a flat fee every month for the duration of your Trust Deed (which will usually last for three years). The following is an illustration of a typical client's Trust Deed.

Typical monthly payments (x36 months) £200

Fee element included in monthly payment (x36 months) £150

Trustee disbursements £130

Total repaid by individual (including fees above) £7,200         

Total unsecured debt written off at completion £15,800

Please note: this is an illustrative example based on a typical client - a borrower with £23,000 of unsecured debt on a Trust Deed lasting three years, who has no equity in a home. Fees shown are inclusive of VAT where applicable.

Your exact fee will be assessed based on your individual circumstances, and your Trustee will be paid before any money is made available to repay your creditors, though your creditors are bound by the Trust Deed once it becomes 'Protected'.

All fees will be taken out of your agreed monthly payment and they are not a separate additional cost.

The fees you are charged will be determined before the Trust Deed starts, as part of your Trust Deed proposal. 

DebtFC do not an charge an Administration Set Up Fee for preparing and collating the information required for your Trust Deed proposal.

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