You may, under Scottish Law, qualify for a Protected Trust Deed, which is a legally binding agreement that provides Scottish residents with a way to write off their debts based on what they can afford.
A Trust Deed is a voluntary agreement between a debtor and their creditors (the people they owe money to) to repay part of what they owe.
The Trust Deed is put together and managed by a Trustee who must be a qualified insolvency practitioner.
When handling Trust Deeds the insolvency practitioner is regulated both by law and their regulating professional body.
To become binding on all creditors, a Trust Deed in Scotland must become “protected”. This is achieved around five weeks after a Trust Deed has been signed provided a significant number of creditors (or a single creditor owed a significant amount of money) does not object to the arrangement.
Once your Trust Deed becomes protected, creditors can take no further action to recover the money that was owed or take legal action in Scotland against the debtor.
A licensed insolvency practitioner, who negotiates with your creditors and ensures that you keep to the terms of the agreement, supervises the Trust Deed process. When the specified payment term is finished, the remaining debts are written off.
Like all debt solutions, trust deeds come with advantages and disadvantages. In most cases the advantages of a trust deed far outweigh the disadvantages and are an easier way of managing your debt than other debt management solutions.
The Trust Deed will appear on your credit record and may affect your ability to take our future credit products and services. You can't usually apply for different types of debt management such as bankruptcy and debt repayment programs whilst your Trust Deed is running.
If you're a Scottish resident having trouble meeting the demands of your creditors, you may qualify for a Trust Deed. There is no minimum or maximum amount of debt required before a trust deed can be signed.
Granting a trust deed is a voluntary act but once a person has signed a trust deed he and the trustee are legally bound by it.
It is possible to sign a trust deed even if you have no assets! If you are prepared to pay a proportion of your earnings to the trustee; as long as there is some benefit to your creditors.