A Scottish Trust Deed is a formal financial arrangement in which, with the assistance of a licensed insolvency practitioner (who must agree to act as your Trustee) you are able to write off some of your debt.
A licenced insolvency practitioner deals with both you and your creditors in order to achieve a mutually acceptable financial outcome so that the trust deed can become “protected”. Once the trust deed is protected, you are no longer required to make payments or communication with your creditors and the trustee deals directly with them on your behalf. Your creditors are not allowed to take any further action against you, if you comply with the terms of your trust deed.
Your trustee will sell any available non-essential assets and will collect a regular contribution (if you are able to make one) from your disposable income. When the trust deed ends, normally after a period of four years, any unpaid debts are written off and your creditors cannot pursue you for any debts that were included in your trust deed.
QUESTIONS & ANSWERS
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How does my trust deed become “protected”?
Your trustee will write to all of your creditors and ask them to agree to your proposals. A significant portion of your creditors are required to agree in order for the trust deed to gain protected status.
Creditors who choose not to respond are deemed to have agreed.
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What happens if my trust deed is not protected?
A strict process is followed to try and present proposals to your creditors which minimise the risk of objections. In the event that your trust deed is not protected because your creditors have objected to it, then your creditors are able to take you to court and petition for your bankruptcy.
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How should I choose my trustee?
There is a lot of choice when selecting who you want to act as your trustee. No matter which company you go decide to contact, all trustees are governed by the same legislation. As payments are based on affordability, you should pay the same monthly contribution no matter who you choose. Some larger companies operate via telephone only and you’re unable to meet with the individual dealing with your case.
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Do I need to tell my employer?
Unless stated in your contract of employment, you are not under any obligation to tell your employer that you have signed a trust deed.
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