The basic criteria for a Protected Trust Deed include:
Scottish Residence – If you live in Scotland or you have lived here in the past year.
Affordability – Demonstrate that you cannot afford to pay your debts in a reasonable period of time and that you can afford a regular contribution over the term of your Trust Deed, typically 48 months.
Total Unsecured Debt – You would typically have unsecured debts of at least £5,000 to qualify for a Trust Deed.
Property – How much equity you have in the property.
If the lenders that you owe monies to agree your proposals for a Trust Deed it becomes protected. Trust Deeds can only be administered by a licensed Insolvency Practitioner.
If for whatever reason your Trust Deed fails, you could face Sequestration and interest that was previously frozen could be re-applied to your debts. However, this would be fully examined prior to applying for the Protected Trust Deed and you could also pursue other alternatives such as the Debt Arrangement Scheme. The reality for some people is that Sequestration itself, or Minimal Asset Process is a suitable way of dealing with their debts, despite the attached stigma of ‘bankruptcy‘.