With a Protected Trust Deed, you will only pay what you can afford over an agreed period of time (usually 4 years). The interest on your debt will be frozen, and when you have successfully completed a Trust Deed, the remainder of your debt will be written off.

To enter into a Protected Trust Deed, you need a licenced Insolvency Practitioner to act as your Trustee. Parker Philips Insolvency Ltd can help you on your journey to becoming debt free through a Protected Trust Deed if you are eligible. We will deal with your creditors on your behalf, saving you time and taking the stress out of the situation. You will also be legally protected against creditor action.

Am I eligible for a Trust Deed?

To be eligible for a Protected Trust Deed, you must:

• Currently live in Scotland
• You have unsecured debts of at least £5,000
• You must be able to pay a monthly contribution from your income
• You are insolvent (unable to pay your debts as they fall due and/or your liabilities are greater than your assets)

What are the Advantages of a Trust Deed?

There are many advantages of a Trust Deed, including:

• You will only pay back what you can afford.
• Your Trustee will deal with creditors on your behalf.
• You will be protected against creditor action.
• On successful conclusion of a Trust Deed, your remaining debt will be written off.
• If you own assets (such as property) you agree with your Trustee in advance whether the Trust Deed affects them.
• Any wage arrestments currently in place will stop once your Trust Deed becomes protected.

What are the Disadvantages of a Trust Deed?

There can be disadvantages to entering into a Trust Deed:

• Creditors may object to the Trust Deed proposal in order to prevent it achieving protected status
• Your credit file will be impacted
• Your current and future employment may be impacted
• Any assets that you own (including property) may need to be realised for the benefit of your creditors

What Debts are Included in a Trust Deed?

A Trust Deed covers all your unsecured debts with just a small number of exceptions. These include (but are not limited to) student loans, court fines and debts incurred as a result of fraud or a breach of trust.

Joint debts can be included in a Trust Deed, but there is no such thing as a ‘Joint’ Trust Deed. This means that the other party is still liable for the
amount of debt. If this would result in their financial distress, we can provide them with debt advice and enter into their own Trust Deed.

If you have any debts which cannot be included in a Trust Deed, our advisers will make you aware of this.

Will People Find Out I’m in a Trust Deed?

It is unlikely that people you know will find out about your Trust Deed unless you chose to tell them. Whilstthere is a publicly accessible register that holds information about people who have signed Trust Deeds, your friends and family would have to make a conscious effort to look these up to find out about your circumstances.

Your Protected Trust Deed will remain on the Register of Insolvencies for one year after the Trustee has been discharged, then it will no longer be visible.

Will my House be Affected by a Trust Deed? Can I Exclude my House?

In order for a Trust Deed to become Protected, all your assets must be conveyed to the Trustee. That includes any property that you own.

We will establish if there is any equity in the property by instructing a qualified surveyor to carry out a professional valuation (at no cost to you). We will ask you to provide confirmation of the redemption figure for your mortgage and any other borrowing secured against the property.

If there is equity, there are a number of options for addressing it, and we will discuss each of these with you.

It is possible in certain circumstances to propose a different type of Trust Deed which excludes your home. Both your secured and unsecured creditors would need to agree to this exclusion, and it is unlikely they will do so if there is a lot of equity in the property.

When you call our advisers, we will discuss with you whether this approach is likely to be of benefit to you.

How will my Car and Possessions be Affected?

If you own your car, have a reasonable need to use it and it is worth less than £3,000, it will be unaffected by your Trust Deed. If it is worth over £3,000 it is considered an asset and will be conveyed to the Trustee. We will discuss with you the options for addressing this.

Your general household possessions will not be affected by signing a Trust Deed. This includes TVs, mobile phones, laptops, furniture and white goods, for example.

I Have a Guarantor Loan. Can I Include This in a Trust Deed?

All unsecured loans must be included in a Trust Deed, including guarantor loans. It is important to note that if you enter into this type of debt solution, your guarantor will assume full liability for the loan.

If you believe this will leave your guarantor in financial distress, they can also contact us for free, confidential help.

Can I Still Have a Bank Account? Will my Credit File be Affected?

Being in a Protected Trust Deed will not affect your ability to have a bank account; however, you will not be able to use an overdraft.

Your credit file will be updated to show that you have signed a Trust Deed and this information will remain on your file for six years. This means that you may find it difficult to get credit for a period after your Trust Deed is finalised.

Contact Us Today

If you would like more information, book a call back with one of our advisers today, or call us on 0800 989 0189.

Or, to find out more about the other formal debt solutions available, browse through our pages on the Debt Arrangement Scheme, and Sequestration..

Debt Arrangement Scheme

The Debt Arrangement Scheme (DAS) is a formal debt management plan that was introduced by the Scottish Government. It is designed to help people in financial difficulty in Scotland achieve a debt free future. If you are struggling with your monthly debt repayments, but feel you could repay what you owe given enough time, the Debt Arrangement Scheme may be an option for you.

Am I eligible for a DAS?

You are eligible to enter a DAS if you:

• Live in Scotland
• Have one or more debts
• Have a reasonable amount of money left to pay your debts after all your outgoings
• Are not bankrupt, subject to a Sequestration restrictions order or undertaking, or in a Protected Trust Deed

To find out if you are eligible, call us today and we will fully assess your circumstances.

What are the Advantages of the Debt Arrangement Scheme?

There are many advantages of the Debt Arrangement Scheme, including:

• You will receive a personalised debt repayment plan based on your needs and lifestyle.
• Your monthly payments will be based on what you can afford and is flexible if your circumstances change.
• The interest on your debt will be frozen.
• You will be protected against creditor action.
• Your assets will be protected meaning you will not be asked to sell your house, or your car.
• We will deal with creditors on your behalf.

What are the Disadvantages of the Debt Arrangement Scheme?

Whilst there are advantages, that are also disadvantages to a DAS:

• You will be subject to certain conditions and if you don’t comply with these conditions, your DAScould be revoked which means creditors can take legal action against you again.
• You will be unable to obtain credit or use an overdraft while you are in a Debt Payment Plan.
• Your credit rating will be affected.
• There is no debt write off and it could take longer to repay your debt than with other debt solutions.

What Debts are Included in the Debt Arrangement Scheme?

The Debt Arrangement Scheme covers unsecured debts, for example credit cards, store cards and catalogue debts, overdrafts, unsecured loans, payday loans and debt owed to HMRC. It also includes arrears on your mortgage, rent, utilities or council tax.

Ongoing secured payments cannot be included and you must continue to make payments to these creditors outside your DAS.

Will People Find Out I’m in a Debt Arrangement Scheme?

Details of your Debt Payment Plan will be placed on the DAS Register (available online) and will remain there until your payment plan is complete. Although this register can be accessed by anyone, it is unlikely that people you know will find out unless you choose to tell them.

Will my House, Car and Personal Possessions be Affected?

Your home will not be included regardless of its value. However, if you have significant equity in your property, it may be worth considering whether you have alternative means of raising funds to reduce your debts.

Your car will also be excluded, however, if it is of high value you may want to consider replacing this with a lower cost alternative to help reduce your debt level.

Your household goods such as furniture, computers and electrical equipment will not be taken into consideration. However, if you own property in addition to your own home, have investments or savings, or any non-essential household items of value (such as jewellery or antiques) you may want to consider using these to reduce your debt level.

Can I Still Have a Bank Account? Will my Credit File be Affected?

You can still use a bank account while you are subject to aDAS; however, you will not be able to use an overdraft facility.

Your credit file will be updated to show that you have entered into a DAS. This means you will not be able to obtain credit during your DAS and it may be difficult for you to get credit for some time after it is completed, as it may take a number of years before this drops off your credit file.

Contact Us Today

If you would like more information on the Debt Arrangement Scheme, book a call back with one of our advisers today, or call us on 080069880094

Alternatively, find out more about the other formal debt solutions available such as Protected Trust Deeds, and Sequestration.

Sequestration

Sequestration is a form of insolvency available to people who cannot afford to pay their debt.

What are the Advantages of Sequestration?

There are manyadvantages of Sequestration, including:

• You will only pay back what you can afford (if anything) over a 4 year period
• You are usually discharged within 12 months
• Your Trustee will deal with creditors on your behalf.
• At the end of your Sequestration your remaining debt will be written off

What are the Disadvantages of Sequestration?

There are also many disadvantages for you to consider:

• Your credit file will show that you have been sequestrated, and this information will stay on your credit file for six years.  As a result of this, you may find it hard to get credit, even after your Sequestration has ended.
• Control of your assets will be passed to your Trustee. That includes any property that you own – it is not possible to exclude a property from a Sequestration..
• You must declare that you are sequestrated to any person you attempt to obtain credit from, regardless of whether it’s an individual or joint application where the credit amount totals £2,000 or more, or in all circumstances, where you already have debts totalling £1,000 during the sequestration.
• Your employment may be impacted.

Who Can Apply for Sequestration?

To apply for a full administration sequestration, you must:

• Be a Scottish resident,
• Have debts of more than £3,000.
• Have not made been sequestrated in the last five years.
• You are unable to pay your debts and have been granted a Certificate for Sequestration by an authorised person.
• You can pay the £200 application fee to the AiB.
• You have received advice from an approved money advisor.

What Debts are Included in Sequestration?

Similar to a Trust Deed, Sequestration covers all your unsecured debts; however there are a few exceptions. These include student loans, court fines and debts incurred as a result of fraud or a breach or trust. Our advisers will explain if any of your debts cannot be included.

Will People Find Out I’m Sequestrated?

All Sequestrationsare recorded in the Register of Insolvencies (ROI), which is free to access online; however, in most cases, the people you know will not find out unless you tell them yourself.

Will my House be Affected by Sequestration? Can I Exclude my House?

Any property you own will be conveyedto the Trustee and theywill establish if there is any equity in the property. They will be required to release that amount for the benefit of creditors, but it does not automatically mean that you will need to sell your home.

During our discussions with you, we will ask you to confirm the redemption figure for your mortgage and any other borrowing secured against the property.

If there is equity, there are a number of options for addressing it, and we will discuss each of these with you.  We will agree with you in advance how the Sequestration will affect your property, giving you peace of mind.

Will my Car and Possessions be Affected by Sequestration?

If you have a reasonable need to use your car, and it is worth under £3,000 it will not be affected by Sequestration.  If your vehicle is worth more than this, the Trustee will have an interest in it. Our advisers will be able to discuss this with you when you call them.

Other possessions such as white goods, jewellery, mobile phones etc, will not be included.

Can I Still Have a Bank Account? Will my Credit File be Affected?

Yes, you can still hold a current account; however, in some cases, your bank may freeze or close your account once you have been made Bankrupt.  You will also not be able to make use of an overdraft facility.

It is good practice to hold a current account with a bank you don’t owe money to.  Therefore on some occasions our advisers may suggest you change banks.

Your credit file will show that you have been sequestrated, and this information will stay on your file for six years. As a result of this, you might find it difficult to get credit for a period of time after your Sequestration is complete. You also cannot obtain credit of more than £500 without telling the lender that you have been sequestrated.