Sharon McDougall - Updated - 25th January 2024 - 3 minutes to read
An Individual Voluntary Arrangement (IVA) is a formal agreement between you and your creditors. It is negotiated and set up by a licensed Insolvency Practitioner (IP), who administers it over the full term.
Once terms have been accepted by a minimum of 75% of creditors, the agreement becomes legally binding and they will no longer be able to pursue you through the courts. Interest and charges on the debt are frozen, and at the end of the agreement any monies still owing will be written off.
The appointed Insolvency Practitioner is the point of contact for creditors, relieving you of the stress of dealing with them. The IP takes their fee from the monthly repayment amounts, which are calculated according to your income once household and living costs have been taken into account.
Get a rough indication of what your monthly repayments might be under each of our different debt solutions.
Scottish IVA (or Trust Deed)
Although Individual Voluntary Arrangements are only applicable in England, Wales and Northern Ireland, a similar debt solution exists in Scotland – the Trust Deed, or in some cases, the Protected Trust Deed.
The similarities between an IVA and a Scottish Trust Deed include:
One of the main benefits of entering into either of these insolvency procedures is the fact that your creditors are unable to pursue you through the courts for debts included in the agreement.
This, in addition to the fact that interest or charges cannot be applied, allows you greater control over your finances without the worry of the total debt increasing. Making one single monthly payment rather than trying to meet several demands each month also lessens the pressures of being in debt, and allows for more effective budgeting.
With any type of insolvency solution, your credit rating is always going to be adversely affected. A Scottish IVA, or Trust Deed, will appear on your credit file for a period of six years. During this time you may find it difficult to obtain further credit, but once six years has passed you’ll be able to start rebuilding your credit rating.
Any property that is mortgaged or owned outright will form part of the agreement, and may need to be sold. This is by no means certain, however. Sometimes equity can be released via a remortgage, or if a family member is interested in making an investment in your property.
Failing to keep up Trust Deed repayments is a breach of the agreement, and may result in enforced bankruptcy by one or more of your creditors. Furthermore, this is a public process so your name will be entered into the Register of Public Insolvencies for the term of the agreement.
Trust Deeds generally last for four years, and can provide a little financial stability if you have taken on unmanageable debt. During this time, although funds will be restricted, you know that at the end of the term the remaining amounts owing will be written off and you will be debt-free.
Scotland Debt Solutions can offer advice on the correct solution for Scottish residents struggling with debt. Our professional team works from five locations around Scotland, and offers a free initial consultation to discuss your situation.
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Sequestration is the Scottish version of bankruptcy and may be suitable for you if you do not have the money to pay back your debtsFind out More
A Trust Deed involves making a monthly contribution to your debts for up to four years. After this time any remaining debt included in the Trust Deed will not need to be paid.Find out More
A Debt Arrangement Scheme (DAS) lets you pay off your debt through a series of manageable instalments over a reasonable length of time.Find out More
Our Insolvency Practitioners are regulated by ICAS or the IPA and our firm is authorised and regulated by the Financial Conduct Authority
Fees and Information: There are fees associated with our services. These will be fully explained before entering into any of the personal debt solutions referred to on this website. Full details of our fees and how these are charged are fully explained to you prior to you committing to any particular service.