Dealing with debt in Scotland

Scottish law is different to that in England and Wales, and the Scottish equivalent of an IVA is a Protected Trust Deed. Once a Protected Trust Deed is accepted by your creditors, it (and you) are legally protected from further creditor action, hence the term ‘Protected’ Trust Deed (PTD).

How does a PTD work?

Your first step is to draw up a full list of creditors, how much is owed to each one, and what you can realistically afford to pay each month.

The trustee would then compile a proposal to the lenders and they would administer the PTD. Similar to an IVA, a PTD prevents your creditors from taking legal action against you and it would ensure that the interest on the debt is frozen.

You may want to consider the following:

• You will only be granted a PTD if two thirds or more of your creditors agree to it.
• You would not be allowed to enter into any other debt contract.
• Any unexpected windfalls or changes in your financial circumstances should be reported to the trustee
• You would have to co-operate with the trustee and pay the agreed monthly contribution

There are many advantages of a Protected Trust deed, some of which are the following:

• Your trustee would correspond with the creditors
• It is a flexible option that costs less than sequestration, the Scottish equivalent of bankruptcy.
• Creditors can not add further interest, charges, or take further action against you
• Certain public offices may still be available to you, and directors and self-employed people may be able to carry on as before
• The duration is three years, after which any remaining debt is written off
• A Trust Deed is a private agreement between you and your creditors, so no information your Protected Trust deeds is published

To find out more about Protected Trust Deeds and ways in which Harrington Brooks can assist you with your debt issues call one of our consultants today on 0808 131 0040.