Trust Deeds

All you want to know about Trust Deeds:

One way out of debts is signing a Trust Deed to repay your creditors. In a Trust Deed, the rights to your assets are transferred to a trustee who in turn sells them to pay your creditors. A Trust Deed includes your income that is contributed here for a stipulated time period, usually 36 months. Generally the trustee is a qualified insolvency practitioner. But you must remember that they should be licensed that is must be members of an approved governing body. However the creditors need to accept the Trust Deed to enforce it. It is only after they accept the deed that it becomes binding on the creditors.

Protected Trust Deed:

Apart from an ordinary Trust Deed, there is a special kind of trust deed- ‘Protected Trust Deed’. Unlike an ordinary Trust Deed, this deed is binding on the creditors. This can stop the creditors from taking any action against you or pushing you towards becoming bankrupt. While in a Protected Trust Deed, you cannot apply for your own bankruptcy or any other debt management programme that comes under the Debt Arrangement Scheme.

Signing a Trust Deed

There are certain things you need to keep in mind while signing a Trust Deed. You should get adequate information on the after effects on a Trust Deed and its alternatives from your trustee before signing a Trust Deed. Trust Deeds are meant for Scottish Residents and so you can ask your trustee to hand over to you a copy of the Scottish Government’s Debt Advice and Information Package. Remember that the trustee will charge for their service and you are free to select your trustee. Get proper information from your trustee about the charges before you sign a Trust Deed. You can get free advice on trust deeds and your other alternatives from Citizens Advice Bureaux or Local Authority money advisers.

Once you sign a Trust Deed:

Your trustee will publish your Trust Deed in the ‘Edinburgh Gazette’- a newspaper that is used by the credit industry. All the credit reference agencies and banks will come to know about your Trust Deed.
Next, you will have to send intimation to all your creditors and ask them to agree your Trust Deed. If your creditors do not respond within 5 weeks, it is assumed that they have agreed.
Once majority of your creditors accept it, your trustee will send the copy of the deed to the Accountant in Bankruptcy.
The Accountant in Bankruptcy will now record your Trust Deed in the Register of Insolvencies. Now your Trust Deed becomes a Protected Trust Deed.

However a Trust Deed does not include:

Fines, penalties, forfeiture orders or any kind of compensation issued by the court.
Any fraud liability
Obligation to pay ailment
Student loans
Debts owed to someone who holds a security on your property like mortgage or a secured loan.

For more information, visit: www.aib.gov.uk .

You can also e-mail at: helpline@aib.gsi.gov.uk

Telephone: 0845 612 6460

Fax: 0845 612 6470

Helpline: 0845 762 6171

Citizens Advice Scotland

Telephone: 0845 450 0351

Website: www.cas.org.uk

A Protected Trust Deed is similar to an Individual Voluntary Arrangement (IVA) in England & Wales.