The Scottish Trust Deed was brought into existence by the bankruptcy act of 1984 which allows those looking to be declared insolvent with a DI in Scotland to be done so at some benefit to the creditors. If you are struggling with problem debts but have no assets of real value then a trust deed may be of great benefit to you as it will allow you to reduce your minimum payments, write off some of the debts and get the creditors off of your back which will be of great relief to anyone who has defaulted on their payments.
How a Trust Deed Works
A trust deed is a legal agreement between you and your creditors to pay back some of the debt you owe. You must seek advice from a qualified money adviser whether that be in the private sector or in at your local authority citizens advice bureau. Once it has been established that a trust deed is the best option for you your case will then be put into the hands of an insolvency practitioner who will be your ‘trustee’ and be in charge of your finances. This Insolvency practitioner will be a qualified debt practitioner who will deal with your creditors on your behalf.
How to Enter a Trust Deed
You will be entered into a Trust Deed after 5 weeks of your insolvency practitioners petition for your insolvency. If any of your creditors object to the petition then you may have to consider an alternative solution. If however your insolvency and Trust Deed have been granted you will then be mentioned in the Edinburgh Gazette as having been entered into a Trust Deed and will be given protected status.
When does the Trust Deed become ‘protected?’
Protected Status will mean that legally your creditors may have no further contact with you and that your estate is in the hands of a trustee. You do not have to legally pay anything back to your creditors or deal with them in any way and are protected by the Insolvency laws in Scotland.