A protected trust deed is a formal debt solution created to help people in debt avoid bankruptcy while still making payments to their debt.
A trust deed is only available to people living in Scotland, the equivalent in the rest of the UK is an IVA.
A person entering a trust deed agrees to repay at least 10% of their overall debt over 4 years with the remainder written off at the end.
How Can I Enter A Protected Trust Deed?
The first step is to get free, impartial debt advice from a reputable debt advice organisation.
The debt advice organisation will make sure a protected trust deed to the correct debt solution. Entering a trust deed wrongly can have extremely bad consequences, such as loss of property, assets or repaying more than the debt was worth.
Once it’s been established a trust deed is the best debt solution, an insolvency practitioner (IP) will be contacted to manage your case.
The IP works as a middle man for you and your creditors, their aim is to put forward the proposal to pay x amount and to recoup as much money for the creditors as possible.
The IP is duty bound to make sure you have no assets or money which isn’t being included into the trust deed.
How Much Will I Pay For A Trust Deed?
While you must repay a minimum of 10% of the overall debt, there is no maximum amount. If the debt can be repaid within a short period of time a trust deed may not be the best solution.
What Will Happen To My House If I Enter A Trust Deed?
Any equity in a property or the value in any assets must be included into the protected trust deed. This used to mean selling assets and or re-mortgaging a property, however that’s no longer the case.
The IP will ask a fee of £500 is paid in order for any equity in the property to not be included into the solution.