Protected Trust Deeds - Frequently Asked Questions.
- What are the differences between an IVA (individual voluntary arrangement) and a protected trust deed?
- Is protected trust deed the right solution for my debt problems?
- Is a protected trust deed the same as bankruptcy or sequestration?
- Why will the creditors agree to a protected trust deed?
- How long does a protected trust deed last?
- Will I lose my house?
- Will my employment status be affected if I enter into a protected trust deed?
- When I have to close down my business?
- Is there any publicity involved with protected trust deed?
- Which creditors can be included in a protected trust deed?
- What happens if I fail to keep up with repayments?
- What happens at the end of the trust deed?
- Will a protected trust deed cover all my debts?
- Can a creditor refuse the protected trust deed?
- What protection do I have from further charges and recovery actions?
- What happens if my financial status changes?
- What happens if the protected trust deed is not approved?
[top] Q1. What are the differences between an IVA (individual voluntary arrangement) and a protected trust deed?
In principle Protected Trust Deeds are Scottish Equivalent of IVA (Individual Voluntary Arrangements) in England and Wales
[top] Q2. Is protected trust deed the right solution for my debt problems?
We help provide unbiased advice for people to help overcome debt problems. A protected trust deed is ideal if you have debts of £15,000 or more and want to clear them without entering bankruptcy or sequestration. For lower amount of debt a debt management plan may be more suitable. In any case, we will try to arrange the best solution that meets your circumstances and your preference. For a no obligation free consultation fill in our online form and one of our debt advisers will contact you shortly to give you the best possible option.
[top] Q3. Is a protected trust deed the same as bankruptcy or sequestration?
No, it isn’t. Although Protected Trust Deed is governed by the court and is a legal binding, it less formal and less risky than bankruptcy or sequestration.
[top] Q4. Why will the creditors agree to a protected trust deed?
At times it may seem as if your creditors do not want to help and will take legal action against you, truth is they want to help you. By taking you to the court they won’t recover their money. As long as you provide them with updates of your situation and maintain an honest and open communication, in most cases they will offer you the cancel to clear up some of the debts out of court and in the process recover as much money as possible.
Bankruptcy or sequestration is costly affair, and a large sum of the money recovered in the process will be used to cover administration cost. So by forcing you to declare bankrupt creditors will be losing more money than helping you arrange a protected trust deed.
Where appropriate your creditors will more than likely offer you the chance to enter a Protected Trust Deed. It is in the best of you and your creditor’s interest.
[top] Q5. How long does a protected trust deed last?
Protected Trust Deeds last a maximum of 3 years. In some cases it may last less than 3 years, depending on your personal financial circumstances.
[top] Q6. Will I lose my house?
No, unlike bankruptcy your house is safe in a Trust Deed. However, if you have any equity in your property it may be taken into account to repay as much debt as possible. If your house is joint-owned, then a proportionate amount will be worked out.
[top] Q7. Will my employment status be affected if I enter into a protected trust deed?
No, entering a Trust Deed does not affect your employment or profession. You will be able to carry on normal with your employment.
[top] Q8. When I have to close down my business?
You are free to carry on with your business; you won’t have to give up a director’s position if you hold one or can continue to be a partner in a business.
[top] Q9. Is there any publicity involved with protected trust deed?
No, protected trust deeds are very private affair and there will be no publicity. Our insolvency practitioners are trained individuals who work in an ethical manner and will maintain your privacy with utmost confidentiality.
[top] Q10. Which creditors can be included in a protected trust deed?
Debt from banks, finance companies, credit cards, store cards, HM Customs and excise (VAT), Inland Revenue and other private loans can be included in a protected trust deed. To find more for free, contact us through our online form. We will call you back to let you know more.
[top] Q11. What happens if I fail to keep up with repayments?
The most important factor of entering a Trust Deed is that you keep up with your repayments. if your financial changes, whether for better or for worse; you should always consult your trustee. If you can no longer afford to pay the agreed amount or can pay more than the agreed amount, your trustee needs to know in order to make sure your protected trust deed reaches its maturity.
[top] Q12. What happens at the end of the trust deed?
In effect, your remaining debts will be written off and you become debt free.
[top] Q13. Will a protected trust deed cover all my debts?
Only your unsecured debts, for example, any personal loan not backed by collateral, credit cards or store cards. Secured loans are backed by security and lenders will want to cease your property. Since there are no security attached to unsecured loans, Trust Deeds are a great way out of debt, as it gives creditors a chance to recover money without huge administration cost.
[top] Q14. Can a creditor refuse the protected trust deed?
Yes they can, but it will stop your trust deed only if the money you owe to them counts for a third of your total debt or more. If their total lending counts for less than a third of you total debt, then they will be bound in a legal term of Protected Trust Deed regardless of whether they oppose it or not.
[top] Q15. What protection do I have from further charges and recovery actions?
Soon as your Protected Trust Deeds gets the go ahead and your repayment schedule starts, no further charges can be brought forward against you and all interest will be frozen.
[top] Q16. What happens if my financial status changes?
Changes to your financial circumstances need to be notified to your trustee, regardless of the change being a good one or bad.
[top] Q17. What happens if the protected trust deed is not approved?
There are other alternatives if your protected trust deed is not approved. Our insolvency practitioners will try their best to help you with a debt solution. |
