Protected Trust Deeds in Scotland
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A Protected Trust Deed, available only in Scotland, is a legally binding voluntary instrument, which offers a practical alternative to bankruptcy. It is the Scottish equivalent of an Individual Voluntary Arrangement (IVA) which has now become well established in the rest of the UK as a less draconian solution to personal insolvency and which carries none of the stigma of bankruptcy’s burden.
It is also cheaper and more flexible than a bankruptcy. Also, because details of the Protected Trust Deed are not published (unlike those of bankruptcy cases), information about your financial standing is not put in the public domain and nobody need know of what has happened.
A Protected Trust Deed is designed to enable those who cannot pay their debts a way to establish a repayment plan every month based on the ability to pay after normal household bills have been met. It usually lasts for three years, although sometimes this can be reduced, and when the term comes to an end any remaining debt is written off.
Protected Trust Deeds are only applicable where a debtor does not have enough disposable income, after paying normal bills and expenses (including rent or mortgage) to pay outstanding credit repayments such as credit cards, unsecured loans, store cards and car finance agreements. Scheduled repayments in a PTD may also include arrears owed to HMRC (previously the Inland Revenue and HM Customs & Excise VAT as separate entities) and Council Tax.
A Trust Deed is registered as a “Protected” Trust Deed if certain criteria are met, and this is where it most resembles the IVA south of the border, in that its protected status means that creditors may not take legal action against the debtor. It also ensures that the interest is frozen. You will not lose your house if you apply for a PTD, but in some cases use may be made of the equity in your property to pay creditors. This will vary in individual cases.
Once in a Protected Trust Deed you should not have to worry about being contacted by creditors and they will not be able to take any legal action whatsoever. It will have no effect on your job or career, unlike bankruptcy or sequestration. If you are a director of a company you will not be obliged to give up your directorship if you take on a PTD, unlike the situation with bankruptcies.
There are lots of advantages in taking out a Protected Trust Deed, but not everyone qualifies for one. To find out if you qualify fill out the application form below.
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If you want to take advantage of our simple online application form why not visit our brand new online Protected Trust Deed application site. Applying is completely free and our experts are waiting to give you a quote.
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