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Having financial difficulties and no obvious way of dealing with them can be very stressful. At this time it is important that you get good advice on all available options open to you and on what action could potentially be taken against you by your creditors. Only then can you make an informed decision on what is the best way forward. It is very important that you get the right advice as soon as you can to avoid any unpleasant surprises. Frequently, people try to "borrow" their way out of debt by consolidating debts or by using a debt management programme. This is often unrealistic as it can take many years to resolve and relies on credtitors not pursuing the debt during this time. What Is A Trust Deed And How Does It Become "Protected"? A Trust Deed is a voluntary arrangement between you and your creditors administered by a licensed Insolvency Practitioner who acts as your Trustee. It is an arrangement that is legally binding, but is less formal than sequestration (bankruptcy). Nevertheless, the signing of a Trust Deed does make you apparently insolvent and it is still administered in accordance with the Bankruptcy (Scotland) Act 1985 (as amended). A Protected Trust Deed prevents creditors from pursuing the debt any further. There is no longer the worry of an earnings arrestment, attachment of assets or an Inhibition placed on your home if you own it. A Trust Deed is based on contributions from your future income, sale of assets or a combination of the two. After the Trust Deed is signed, the Trustee must by Law place a Notice in the Edinburgh Gazette. Thereafter, the proposal is sent to creditors, who have five weeks from the date of the Notice to accept or reject the proposal. The Trust Deed will become protected unless one third in value or a majority in number of the creditors object to the proposal. In reality, objections are relatively rare. Once the five week period has passed and no (or insufficient) objections have been received from your creditors, the Trustee registers your Trust Deed as "protected" which protects you from your creditors as outlined above. At this point, any creditor(s) who objected to the proposal are also bound by the terms of the Trust Deed. Is My Home likely To Be Sold? Highly unlikely and only as a last resort. The main advantage of a Trust Deed over sequestration is that it allows a greater degree of flexibilty in dealing with property. The Trustee's interest in the property is in any remaining equity ie. the difference between the value of the property and any secured borrowings. Provided the equity value is paid by a third party prior to the conclusion of the Trust Deed (usually three years) or by re-mortgage and/or additional contributions by you at the conclusion of the three year period there would be no requirement to consider selling your home. Will My Car Have To Be Sold? Subject to the value of your car (and any outstanding finance in relation to it) the Trustee may not have to sell your car if it is necessary to transport you to and from your place of work andthus contribute to the Trust Deed from your earnings. Again, the value ofyour car may be paid by a third party or by additional contributions by you at the conclusion of the Trust Deed. Will I Be Black-listed? The Trustee does not record the signing of your Trust Deed with a credit reference agency although one of your creditors may decide to do so. Realistically, if you are a likely candidate for a Trust Deed your credit reference may already be impaired. Many people have been discharged from their Trust Deeds and have been successful in obtaining mortgages etc. despite their prior poor credit history. How Much Does it Cost? The weekly/monthly amount of your contribution covers both the Trustee'sfees and outlays and the dividend to the creditors. Your creditors' agree the level of the Trustee's fees as they are the ones who are paid from the monies which remain in the Trust Estate. How Much Must I Repay To My Creditors? Your creditors will be paid a dividend based on the level of funds the Trustee has gathered-in over the period of the Trust Deed from voluntary contributions and/or the sale of any assets. What Happens At The End Of The Trust Deed? Provided you have made all of the agreed contributions, any assets requiring to be realised have been sold and you have co-operated fully with your Trustee, the Trust Deed is usually concluded after three years (similar to sequestration). At this point the remainder of your debt, which is still outstanding following the dividend payment received from the Trustee, is written off. Advantages Of A Protected Trust Deed Stops your creditors from pursuing you Takes the pressure off Is a legally binding arrangement with your credtors May allow you to retain your home and car Less formal than sequestration (bankruptcy) What Happens If I Decide To Proceed? After your free, no obligation initial interview we will send you a letter explaining how a Trust Deed would work for you based on the financial information provided by you at the meeting together with a copy of the information you gave. Should you wish to discuss matters further, or, if you understand the workings of the Trust Deed and are happy to proceed then we will call back on your request. Contact Steve Wilson on (07966) 279866 or email swilson@thomsoncooper.com to arrange a free initial consultation.

Protected Trust Deeds

`Protected Trust Deeds`