Debt Solutions – Scottish Trust Deeds
For people living in Scotland, there is a special provision in case they find themselves struggling with huge debts. The Scottish Trust Deed is designed to help debtors propose a formal plan to their creditors to clear their debt. This is quite different from the Debt Management Plan (DMP) and should not be confused with it.
In order to be qualified for a Trust Deed, your debts must all be unsecured. If you have debts secured against property, for example, the Trust Deed is not the solution for you.
What can you expect from a Trust Deed? Typically, all your debts (unsecured, mind you) will be consolidated into a single debt. You then have to pay off this consolidated debt over a period of 36 months. Of course, the monthly rate is more affordable than all your debts scattered all over the place.
You will need an Insolvency Practitioner, also called the trustee, to draft the formal proposal for you. This person is supposed to be objective and honest, in order to come up with a solution that sees to the interest of both parties – you and your creditors. Once the proposal is drafted and approved by you, he then presents it to your creditors, pending their approval as well. Once the Trust Deed is approved, or protected, your debt no longer earns interest and other charges.
As you can probably see by now, the Scottish Trust Deed is quite similar to the IVA for other UK residents. The main difference is that the Trust Deed is limited to residents of Scotland.
