Protected Trust Deeds
Using formal legislation, we have helped people reduce their overall debt payments to one fixed affordable monthly repayment.
Protected Trust Deeds are a voluntary and legally binding agreement that can replace all your unsecured debt payments into an affordable single monthly payment paid typically over 4 years.
With the help of an Insolvency Practitioner (IP) you will make reduced, affordable repayments to the people you owe money to, and after this period, any remaining unaffordable debt is written off.
Once a Trust Deed is protected, your creditors won’t chase you for payment or add more interest and charges to your debts, and they can’t take any court action.
Protected Trust Deed example
Council Tax Arrears
Total Debt £25,400
* Subject to creditor acceptance. Reduced by figure based on previous contractual payments. Payment subject to individual circumstances. Credit rating may be affected
All Protected Trust Deeds follow the same steps
Just follow our 5 simple steps to become debt free
We understand that dealing with debt can be stressful, but it doesn’t have to be. Every year we help thousands of Scottish residents protect their home, car and lift the burden of debt to enjoy a debt free future.
We recommend you look at what options are available to you so you can make an informed decision, you can do this by:
If you want to proceed with a debt solution, whether it be a Protected Trust Deed, or an alternative method – We will start working on your proposal to make sure your creditors will accept it.
The next step is to get the Protected Trust Deed approved by your creditors.
Typically you make your first affordable payment once your plan is approved, during this time:-
A Protected Trust Deed is a legally binding arrangement in Scotland where you make reduced payments over a typical period of 48 months.
Provided that you comply with the terms, your creditors can’t take further action to recover the money you owe or Sequestrate you.
At the end of the four year period, your unsecured debts are then written off.
The main qualification criteria are that you:
1. Live in Scotland
2. Owe at least £5,000 in qualifying debt
3. Can afford to make a regular payment
You’ll have to keep to a strict budget for the full duration of your Protected Trust Deed: typically forty-eight months.
Your details added to the Register of Insolvencies (ROI), a public register for a period of sixty months. The register is maintained by the Accountant in Bankruptcy (AiB) and is available for viewing by the general public. It contains all details of active Protected Trust Deeds.
Your credit rating will be affected for six years, starting from the date that you enter into the Trust Deed.
You’ll need to check if having one could affect your career. As a Trust Deed is a form of insolvency and entering into one can lead to disciplinary action or dismissal in some sectors, such as those in a legal profession or in financial services. It would usually state in your employment contract if a Trust Deed will affect your job, or you can speak to your HR department in confidence.
Find out more about the benefits and risks of Trust Deeds by calling our experienced debt advice team today on 0141 221 0999.
When considering whether a Trust Deed is right for you, also remember that there are other solutions available to you, that you may find beneficial.
The Debt Arrangement Scheme (DAS) is another statutory debt solution that shares many of the same benefits as a Protected Trust Deed but has likewise it has its own risks and benefits.
If you are self-employed, it is possible to apply for both a Protected Trust Deed and DAS.
Find out more about your self-employed debt help options by calling our experienced team on 0141 221 0999.
The unfortunate answer is yes, your credit rating will be affected by entering into a Protected Trust Deed.
However, you may already have a poor credit rating if you have missed contractual payments to the people that you owe money to for typical unsecured debts such as credit cards and personal loans. If you have already defaulted on some of those credit agreements with your lenders then your credit rating is most likely already negatively impacted.
As a result of entering into a Protected Trust Deed, or any other formal Scottish debt solutions such as DAS or Sequestration, on an informal solution such as a Debt Management Plan, this means you will have arrears notices and default notices registered on your credit report.
When you do miss an instalment to a loan or credit card arrears or a default notice served against you, then this information is recorded by credit reference agencies, who will record it on your credit records.
This information is then retained on your credit reports for a period of 72 months. The same is true for any formal debt solution, such as the Debt Arrangement Scheme.
The typical average duration of a Protected Trust Deed is 48 months, it means it will be recorded on your credit report for 12 months after you have been discharged. Therefore, it can have a continuing effect on you, thereafter.
If you are struggling with unaffordable debt, we would always recommend that you talk to an experienced money advisor who can establish what your options are and how those may fit in with your needs.
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