Trust Deed FAQs

Questions:

• Trust Deed
• What is a Trust Deed?
• Requirements to maintain a Trust Deed:
• How much will I have to pay?

Answers:

• What is a Trust Deed?
  

  A Trust Deed is a legally binding agreement between you and your creditors and is regulated by the Bankruptcy (Scotland) Act 1985 (as amended) which benefits both you and your creditors. A Trust Deed offers a less formal and restrictive alterative to sequestration - particularly if you are a home owner, or joint home owner.   A Protected Trust Deed prevents your creditors from adding further interest, charges, and from taking any further action against you.

  Depending upon your circumstances you benefit from:

  • Up to 90% of your outstanding debt written off. (Excluding fees) 
  • Be debt free within 36 months.
  • All interest and charges on your debts will be frozen.
  • You will be protected from further court action once your Trust Deed has been protected.
  • All contact from your creditors will be dealt with on your behalf by your Trustee.
  • Your monthly contribution is based on what you can realistically afford.
  • Trust Deeds (and sequestrations) will not be published in your local newspaper.
  • It will not affect your job in any way i.e. if you are a police officer or in the armed forces. (subject to contract)
  • Trust Deeds are more flexible, less restrictive and generally cost less to administer than sequestration.
  • You can re-mortgage whilst under a Trust Deed. 

  After the term of the Trust Deed the remainder of the debts are effectively written off leaving you debt free in three years.

  A Trust Deed is a legally binding agreement between you and your creditors. It is regulated by The Bankruptcy (Scotland) Act 1985 (as amended) and offers a less formal and restrictive alterative to sequestration - particularly if you are a home owner or joint home owner.

  What criteria do I need to meet?

  • 1 creditor or more
  • A minimum debt level of £10,000
  • A minimum monthly contribution of £175 or £200 if you have no assets.
  • In full time employment or retired with private pensions.

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• Requirements to maintain a Trust Deed:
  
  • You will be required to release any equity in your property.
  • If you were to default on the arrangement then the Insolvency Practitioner can petition for your sequestration.
  • You must declare any windfalls, inheritance or pay increases to your (trustee) Insolvency Practitioner.
  • If you bank with one of your creditors you may need to open a new bank account.

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• How much will I have to pay?
  

  This all depends on your circumstances; your monthly contribution is based on your income & expenditure, therefore will be affordable for you. You will be required to set up a standing order with your Insolvency Practitioner, which will then go in to your Trust Deed account.

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