Trust Deeds

The benefits of a trust deed are:

• From receipt of information and payment, a Trust Deed can be completed within a short time.
• Creditors must stop adding all interest.
• In the majority of cases the term of the Trust Deed is 3 years, and then the debt is written off.
• In many cases this could reduce the debt by up to 90%
• Allowance of expenditure can be more generous for you in a Trust Deed than a normal informal arrangement.
• Creditors (who may otherwise have been difficult) must comply with the arrangement, providing the debt owed to them is not more than one third of the total debt.
• The arrangement is legally binding. In other words, once protected the creditors cannot change their minds.
• The protected Trust Deed avoids bankruptcy.
• Unlike bankruptcy, your employers will not be told. In many cases, this can be a very important issue, where an employer finding out could lead to loss of a job.
• A licensed insolvency practitioner, who will take responsibility for liaising with your creditors and distributing your contributions on your behalf, will administer your Trust Deed.

How does it work?

• To enter into a Trust Deed you need the help of a licensed Insolvency Practitioner. This is the person who helps you prepare the Trust Deed and is called the "Trustee".
• The Trustee will arrange an appointment with you to go through all details and to sign the Trust Deed.
• To protect a Trust Deed, the Trustee places a notice in the Edinburgh Gazette. Your creditors then have 5 weeks to respond to the Trustee with their decision. The main users of the Edinburgh Gazette are the major lenders and there is no local newspaper advertising.
• If less than a third of your creditors vote in against acceptance, then your Trust Deed will automatically become protected.
• A Protected Trust Deed ensures that you are legally protected from your creditors and they cannot enforce their debt further.

What will happen afterwards?

• If you keep up your payments for the period of the Trust Deed arrangement then your debts will be discharged in full.