Protected Trust Deed Help

Protected Trust Deed In Scotland

A Protected Trust Deed gives a person living in Scotland that is struggling with the burden of unmanageable debts, the opportunity to come to an affordable agreement with their unsecured creditors.

A Scottish Trust Deed, which usually lasts for 3 years, is an alternative to bankruptcy, or as it is called in Scotland sequestration.

After the Protected Trust Deed has been approved by the required formula of creditors, it becomes a legally binding agreement that all creditors must adhere to, legally under the terms of this agreement, creditors must put a freeze on all interest and charges including late payment fees or other similar penalties.
Due to a Protected Trust Deed being a legally binding agreement, it must be administered by a licensed Insolvency Practitioner. The insolvency practitioner’s main role and duty is to act as the Trustee for the duration of the Protected Trust Deed.

One of the insolvency practitioner’s roles is to liaise between the person in the trust deed and their creditors. Another part of the insolvency practitioner’s role is to ensure the person in the trust deed pays as much as he can afford into the trust deed for its entire duration thus ensuring as much money as possible is paid back to creditors , they are also responsible for ensuring creditors stop all harassment of the person in the trust deed.

Payments into the trust deed are paid on a monthly basis and are given directly to the Trustee. They are set at an affordable level, based monies left over after reasonable living allowances for the applicant have been deducted. A duty of the Trustee's is to distribute the money to your creditors throughout the arrangement,. The trustee has to ensure fair and proportionate distribution back to each of the creditors.

The Trustee can amend the Trust Deed payments at any time, if the person in the trust deeds personal /financial position either deteriorate or improve through the duration of the Trust Deed. The Trustees job is to monitor the financial position throughout the arrangement ensuring his/her financial input remains fair and reasonable.

Trust Deed Scotland

Once the Trust Deed has been completed (Approx 36 months) the applicant is legally free of debt. If there is any sums of money outstanding at the end of the term of the trust deed this money is written off by the creditors.

Before you consider entering a trust deed you must have at least £10,000 in unsecured debts, in addition the debt should be owed to at least 3 different creditors.

For a trust deed to be considered for approval by creditors you must be able to repay at least 10% of the debt. This percentage is after the Trustee has deducted his fees for administrating your Protected Trust Deed.