Scottish Trust Deed

A Scottish Trust Deed is only available to residents of Scotland, and to those who currently owe approximately £10,000 to creditors. It is essentially the same as an IVA, but will allow you to become debt free in 36 months as opposed to the 60 months that an IVA would take.

The trust deed is arrange by a Licensed Insolvency Practitioner who will act on your behalf to freeze interest and charges you owe to creditors, and to calculate a monthly payment that will allow you to clear your debt at the end of the 36 month period. The amount will be based on your level of debt, income and the cost of living. Your disposable income will be used to pay off as much of the debt as possible. At the end of the Trust Deed, the amount of you pay from the Deed will be considered to be your full and final payment and you will become debt free. This method allows you to write off up to 90% of your debt in some cases.

Other factors to remember are that at least 66% of the creditors you owe must agree to the Trust Deed for it to becomes legally binding. If the Deed is agreed, the creditors can no longer hassle you or begin legal action against you. It is also worth remembering that the Insolvency Practitioner will take a fee from the total amount you pay into the Trust, and it is worth contacting more than one company to see which plan suits you best. If their fee is too high, it may result in the creditors rejecting the Trust Deed when it is proposed.

Taking out a Trust Deed will severely affect your credit record. You will not be able to take out any further credit over the 36 month period, and may find it difficult to get crediot even after this period has ended.