Protected Trust Deeds are a form of personal insolvency in Scotland.
They were introduced as a formal debt management solution for residents of Scotland with problem debt and have been revised a number of times since they were first introduced.
Every year, thousands of people use Trust Deeds as their choice of debt solution alongside other formal debt solutions known as the Debt Arrangement Scheme and Scotland’s equivalent of bankruptcy, known as Sequestration.
In order to qualify for a Protected Trust Deed, your unsecured debts need to outweigh the value of your assets, such as a house or vehicle(s) and you would typically owe a minimum of £5,000.
While this is the minimum, there is no recognised maximum amount with some Protected Trust Deeds being put in place with over £40,000 of unsecured debts.
Unsecured debts typically include the likes of credit card debts, personal loans and store cards.
Benefits of Protected Trust Deeds
- Debt payments are rearranged over a period of 4 years so that they are affordable for you. After this time any remaining debt is written off.
- Once your Trust Deed is protected, your creditors won’t chase you for payment or add more interest and charges to your debts, and they can’t take any court action.
- You get to protect your home and car.
Risks of Protected Trust Deeds
- Your credit rating will be affected for six years, starting from the date the arrangement is agreed.
- There’s a risk of sequestration if your Trust Deed fails.
- Trust Deeds may affect the terms of your employment for certain occupations. If you’re concerned about this you should check your contract or speak to your human resources department.
When people think of insolvency, bankruptcy or sequestration there is sometimes a stigma attached to these words which can deter an individual from seeking help with debt in Scotland. However, the reality is that many more people every year are using Trust Deeds and the alternative methods of debt help in Scotland to get their finances back to a reduced, affordable level.
We have 4,000 debt advice reviews, and this can be a good starting point to find out how other Trust Deed Scotland clients found the process in their own words, which helps to shows that Trust Deeds are an insolvency product that not only helps people with their debt but furthermore allows them to successfully get their lives back on track.