IVA and Trust Deed Debt Advice

IVA and Trust Deed Debt

The difference between an IVA and a Trust Deed is minimal, although significant. In Scotland, the debt solution is called a Protected Trust Deed, while the rest of the UK calls it an IVA. The difference is the law.

Both debt solutions enable you to repay a proportion of your debt (what you can afford) and have the rest written off. However, there are subtle differences between an IVA and Trust Deed for instance;

- They are governed by a different legal system
- An IVA lasts usually for a minimum of 5 years (6 if you have property)
- A Trust deed usually lasts for a minimum of 3 years
- If you have equity in your property in an IVA then the solution can last for an extra year
- If you have equity in your property in a Trust Deed then you must remortgage or refinance (possibly even sell) the house
- The minimum amount of unsecured debt to enter a Trust Deed is typically £10,000, whereas it's £12,500 in an IVA
- When you put the proposal to your creditors the system is completely different (1/3rd in value must accept or majority in number of creditors for a Trust Deed, in an IVA its 75% must accept)

The benefits of an IVA and Trust Deed

There are both benefits and negatives of an IVA and Trust Deed. The benefits include;

- Only repay what you can afford each month
- Stop creditors pestering you; the IVA / Trust Deed company will look after that
- The solution is legally binding so if your creditors agree to your IVA / Trust Deed then they can't go back on the agreement

The negatives of an IVA and Trust Deed


- The IVA and Trust Deed will have a negative impact on your credit rating
- If the solution fails you would face Bankruptcy
- Your creditors don't have to accept your proposal so make it as good as possible