Protected Trust Deed
A Protected Trust Deed, available only in Scotland, is a legally binding voluntary arrangement, which offers a practical alternative to bankruptcy. It is the Scottish equivalent of an Individual Voluntary Arrangement (IVA) which has now become well established as a less draconian solution to personal insolvency and which carries none of the stigma of bankruptcy’s burden.
It is also cheaper and more flexible than a bankruptcy. Also, because details of the Protected Trust Deed are not published information about your client’s financial standing is not put in the public domain and nobody need know of what has happened.
A Protected Trust Deed is designed to enable those who cannot pay their debts a way to establish a repayment plan every month based on the ability to pay after normal household bills have been met. It usually lasts for three years, although sometimes this can be reduced, and when the term comes to an end any remaining debt is written off.
Scheduled repayments in a PTD may also include arrears owed to HMRC (previously the Inland Revenue and HM Customs & Excise VAT as separate entities) and Council Tax.
A Trust Deed is registered as a “Protected” Trust Deed if certain criteria are met, and this is where it most resembles the IVA south of the border, in that its protected status means that creditors may not take legal action against the debtor. It also ensures that the interest is frozen. If your client has equity in their property, they will need to introduce a sum in lieu of equity. This will vary in individual cases.
- Client must be insolvent
- Client must live in Scotland
- Unsecured debts of £10,000+
- 3+ Creditors
- Minimum dividend to creditors 10p in the £
Charges to your client
All fees will be discussed in detail with your client prior to any plan being put in place.
The trustee’s fees and costs are paid out of the same fund of money created from the sale of the clients’ assets and/or contributions made from their disposable income.*
* The Debt Advisor Ltd does not administer Protected Trust Deeds. Your client will be referred to our preferred partner – please contact us for further information.
Please click here to see details of our revenue share for Protected Trust Deeds