IVA in Scotland
Find out more about the Scottish IVA equivalent
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May not be suitable in all circumstances. Fees apply. Your credit rating may be affected.
Free debt counselling, debt adjusting and providing of credit information services is available to customers by contacting MoneyHelper.
Protected Trust Deeds
Scotland’s equivalent to an IVA
What is an IVA in Scotland?
An Individual Voluntary Arrangement is a formal debt solution available for residents of England, Northern Ireland and Wales.
If you are a resident in Scotland then the equivalent Scottish IVA is known as a Protected Trust Deed.
How could a Trust Deed help you?
Trust Deeds work in the same way as an Individual Voluntary Arrangement:
◾ Enables you to only pay what you can afford on a monthly basis.
◾ Freezes interest and charges.
◾ Allows for some of your unaffordable debt to be written off.
In order to find out whether a Protected Trust Deed is a suitable debt solution for you, we would always advise that you speak to an experienced debt adviser to find out more about the help that is available to you and any relevant advantages and disadvantages.
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What’s the difference between a Scottish IVA and Trust Deed?
While a Trust Deed is the equivalent of an IVA in Scotland – there are some differences between the two formal debt solutions that do vary.
| Protected Trust Deed | IVA | |
|---|---|---|
| Where | ||
| Scotland | Rest of UK | |
| Minimum Debt Level | ||
| £5,000 | No Minimum | |
| Maximum Debt Level | ||
| Unlimited | Unlimited | |
| Minimum Duration | ||
| 48 Months | 60 Months | |
| Debt Types | ||
| Unsecured Debt | Unsecured Debt | |
| Interest Frozen | ||
| Yes | Yes | |
| Formal Debt Solution | ||
| Yes | Yes | |
| Protects Home & Car | ||
| Yes | Yes |
The Scottish Trust Deed and the rest of UK IVA are not the only equivalent solutions.
For example, the Debt Relief Order (DRO) available to residents in England and Wales and the Scottish equivalent Minimal Asset Process (MAP) route to Sequestration have common similarities but are not fully comparable. One example: the DRO has an application fee of £90 whereas, in Scotland, it is free to apply for MAP.
The Debt Arrangement Scheme (DAS Scotland) is one of the main statutory debt solutions for people in Scotland. There is no similar formal solution in the rest of the UK however an informal Debt Management Plan exists.
Introduced in 2004, the Debt Arrangement Scheme in Scotland is administered by a qualified Money Adviser and is overseen by the Scottish government.
A DAS is designed to help you pay back your debt at regular, manageable intervals – without the threat of legal action hanging over you, they can also be used by individuals and businesses who are struggling with unaffordable debts.
Call us today on 0141 241 6299 and find out more about what we can do to help you too.
Can a Trust Deed or IVA last longer?
As a minimum, an IVA typically lasts sixty months and a Protected Trust Deed typically lasts forty-eight months.
This duration may be longer depending on your circumstances and the level of your debts.
The Debt Arrangement Scheme may allow you to pay off your debt in a quicker timescale depending on how much debt you have and how much you can afford to repay.
The Minimal Asset Process route to Sequestration in Scotland allows an individual to reach a brighter future in a period of six months, whereas the equivalent form of Bankruptcy in the rest of the UK; the Debt Relief Order (DRO) can enable those eligible to reach a brighter future in a period of twelves months.
Whether you intend to apply for an IVA, Trust Deed or any other formal debt solution – always seek advice from an experienced money or debt adviser first.
Get Help NowHow much debt is written off?
Once you have successfully completed your Protected Trust Deed or IVA, all unaffordable debt will be written off. Our customers can write off up to 70% of their debt.
Our data is based on 5,234 Protected Trust Deeds currently administered by Trust Deed Scotland® and granted between January 2017 and September 2021.
In this sample of PTDs, the expected write-off figure reaches as high as 83%. 5% of the PTDs have an expected write off figure between 71% and 83%.
95% of the PTDs have an expected write off figure of up to 70%, the average (mean) being 45% when the costs of administration are included.
Of the cases in this sample, 1,823 were granted since the Covid-19 pandemic took effect in 2020. The average expected debt write-off for these cases is slightly higher at 49%, when the costs of administration are included.
However, your decision to apply for a Protected Trust Deed should not be taken purely on a proposed debt write off amount alone. A conversation with an experienced debt adviser will allow you to make an informed decision on an outcome that’s right for you.
Get Help NowWhere can I get a Trust Deed or IVA?
Protected Trust Deeds – The Scottish IVA equivalent are available to residents of Scotland. You may also be eligible to apply for a Protected Trust Deed if you live outside Scotland but have lived in Scotland within the last 12 months.
IVAs are available to residents in the rest of the United Kingdom.
What is the minimum debt level?
There is no maximum amount of debt for either a Protected Trust Deed or an IVA.
To apply for a Protected Trust Deed, you must owe a minimum of £5,000 to your creditors. There is no minimum debt level to enter an IVA.
Whether you have a low debt level or a high debt level – the key aspect to consider is your own affordability and any fees that may be charged for entering into the solution.
Do my Creditors have to agree?
With a Trust Deed, 67% of the total debt or people you owe money to (creditors) need to accept the proposal in order for it to become Protected whereas in the rest of the UK – the people you owe money 75% of the votes (by the value of debt) must be in favour of the proposal for the IVA to be approved.
If this happens, all of your unsecured creditors, whether they voted yes, no or didn’t vote at all, are legally obliged to abide by the terms of the Trust Deed / IVA agreement.
In order to establish whether this would be likely to happen it is important to have a conversation with an experienced debt adviser so that you can work out whether the creditor (person you owe money to) can assess your situation and advise accordingly.
Do I pay interest in a Protected Trust Deed or IVA?
Both Protected Trust Deeds and IVAs freeze interest and charges on the debts they cover unless your circumstances change were to change and you can afford to repay your debt in full.
In a Protected Trust Deed, if you are able to repay your debts in full, then Trustee’s fees, outlays and statutory interest also apply.
Whether you are setting up an IVA agreement or are in the midst of a repayment plan, if you were to gain access to a large sum of money that covers most of your debt, you may able to offer your creditors a Full and Final IVA Settlement.
The expected debt write-off figure of up to 70% is based on 1,671 Protected Trust Deeds currently administered by Trust Deed Scotland® and protected between 1 January 2023 and 31 December 2023. The expected write-off percentage includes the costs of administering each Protected Trust Deed (PTD). More information relating to the costs of administration can be found by clicking here. In this sample of PTDs, the expected write-off figure reaches as high as 84%. 226 PTDs or 13.5% of the cases have an expected debt write-off percentage between 70% and 84%. The average (mean) expected write-off is 51%.
