If your Google search history has ever featured “What is a Trust Deed in Scotland” this is the webpage you were looking for. A Protected Trust Deed is essentially a debt relief solution open for individuals with £5,000 or higher value of unsecured debt. It is only available for people living in Scotland with every other country in Great Britain having a suitable alternative under a different name.
How Does A Trust Deed Work?
A Protected Trust Deed is essentially a debt help tool which is an agreement between an Insolvency Practitioner or IP and an individual under debt. The IP acts like a trustee in this relationship and manages the individual’s debts with his/her respective creditors.
Under a Protected Trust Deed, all interests related to the debtor are frozen, and the IP ensures that they only pay back what they owe and no additional interest from the date their agreement is signed.
What Are The Benefits Of A Protected Trust Deed?
One of the biggest advantages of this agreement is that debtors have heightened control over their assets, including properties, vehicles, and other valuables. Debtees cannot claim any part of the debtor’s assets if they meet all terms under the established Protected Trust Deed.
In addition to the above, under a Protected Trust Deed, debtees no longer contact the debtors, and rather all correspondence is made with the trustee or the Insolvency Practitioner. If all terms of the agreement are being met periodically, the debtees can no longer trouble the debtors or take any further legal action against them.
Eligibility For A Protected Trust Deed
To be eligible and qualify for a Protected Trust Deed, certain conditions need to be met. For instance, the individual interested in entering a Protected Trust Deed must be living in Scotland for at least the past 12 months, or have an established business in the country. The said individual must also have at least £5,000 in unsecured debts that are yet to be paid back.
The said individual must also be able to pay back a certain amount every month towards the agreement. This amount will be decided by the Insolvency Practitioner based on the debt owed and is calculated based on the individual’s expendable income.
Another aspect of being eligible for a Protected Trust Deed is that the individual needs to be proven insolvent. Being insolvent refers to the state of having debts that are greater in value than the individual’s combined assets. The individual also needs to not have declared bankruptcy in the last five years to be eligible for the same.
Loans Eligible For A Protected Trust Deed
Loans that are eligible for a Protected Trust Deed include personal loans, credit card loans, payday loans, arrears towards council taxes, arrears towards rent payments, and any dues on car parking charges. If any personal guarantees have crystallized, they too can be eligible for a Protected Trust Deed.
