Protected Trust Deed

A trust deed is a Scottish only debt solution which can allow people in debt to avoid entering sequestration while getting more money back for creditors.

The Scottish trust deed is best suited to people who can afford to repay some of their debt but it would take too long to repay the full amount.

Before anyone considers entering a protected trust deed it’s important they understand exactly what they are going to be agreeing to.

In a trust deed the person in debt proposes to repaid a percentage of their debt over 4 years but creditors can rejected it. In order for creditors to stop the trust deed they’ll need to be owed a third of the debt or majority in number.

Trust Deed Process

Once someone has spoken to an independent debt advice charity and been advised the trust deed is the best debt solution they can begin the process.

In order to enter a Scottish trust deed an insolvency practitioner is required to manage the solution as a middle man between creditors and debtors.

The insolvency practitioner will collect all necessary documentation and complete the paperwork to put forward a proposal to creditors. Once the proposal has been put forward the creditors have 5 weeks to place an objection and reject the offer received.

So long as one third in value or majority of creditors don’t object the trust deed will become protected and they can’t take any further action.

So long as the monthly contributions are maintained as per the agreement the creditors are not allowed to take legal action or contact the debtor.

Scottish Trust Deed Benefits

People who enter a Scottish trust deed are usually between two other solutions, debt management plan and bankruptcy but these usually aren’t suitable.

If someone has debt which will take longer than 5 years to clear they could cut the the time by avoiding the DMP and entering the trust deed.

For those people who are working, entering bankruptcy will likely mean they’ll repay just as much money but don’t get to put forward a proposal. They could be asked to pay even more money.

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