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Scottish IVAs – What you need to know about IVAs and debt management in Scotland

Sharon McDougall - Updated - 16th May 2024 - 3 minutes to read

If you live in Scotland and are finding it difficult to keep up with debt repayments, you may be eligible to enter a Scottish IVA (Individual Voluntary Arrangement). An IVA in Scotland allows you to repay your debts over an extended period of time, and is a formal insolvency procedure.

The correct term for an IVA in Scotland is actually a Trust Deed. Individual Voluntary Arrangements are available in England, Wales and Northern Ireland, but the Trust Deed is the Scottish equivalent, albeit with slight variations.

Here we look at how Scottish Trust Deeds work, and whether they could be suitable for your own financial situation.

What is a Trust Deed?

Trust Deeds are available to people who have been resident in Scotland for a minimum of six months, and who are struggling with debt. They provide an alternative to sequestration (bankruptcy), offering a way for someone with limited disposable income to repay some of the money they owe.

Assets including property may be taken into account when repaying creditors, and sold to release money if there is sufficient equity available.

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How would it work for you?

A Trust Deed allows you to pay off a proportion of your unsecured debts at an affordable rate that is negotiated by a Trustee. Your income and expenditure are analysed, and a decision made about how much you could afford to pay each month, once essential living costs have been accounted for.

A proposal is then presented to your creditors, who have five weeks to object if they don’t agree with the terms. If fewer than half the number of creditors makes an objection, or those representing less than one third in value of the overall debt, the Trust Deed becomes ‘protected’ and creditor action stops.

What is the eligibility criteria for a Trust Deed?

To be eligible for a Protected Trust Deed you must:

  • have been a Scottish resident for at least six months
  • owe debts of more than £5,000
  • be in employment, so that you can make regular monthly repayments

The role of your Trustee

Your Trustee will be a licensed insolvency practitioner, appointed to oversee and administer the Trust Deed. They determine how much you can afford to pay each month, negotiate with your creditors, and distribute the monthly amount amongst them.

Part of their role is to ensure that you’re aware of all alternative options, such as the Debt Arrangement Scheme. They must let you know the consequences of entering into a Trust Deed, and be certain that you understand what will happen.

A vital figure in the process, the Trustee ultimately decides whether or not you have met the terms of your Trust Deed, and when you can be released from the agreement. Should your circumstances change when the Trust Deed is in force, your Trustee may be able to increase or decrease payment amounts accordingly.

What are the ramifications of entering into a Scottish Trust Deed?

One of the main consequences of entering a Trust Deed is the adverse effect on your credit rating. The credit reference agencies will be informed of the fact that you’re in an insolvency procedure. This will remain on your credit file for six years, even though the Trust Deed period generally lasts for four years.

This will make it harder for you to obtain credit and other borrowing, and may also affect your ability to work in certain jobs. If the Protected Trust Deed fails, your creditors have the right to take legal action against you, which could result in your sequestration.

What are the main features of a Trust Deed?

If you feel that a Scottish Trust Deed may be appropriate for you, Scotland Debt Solutions can help. We provide independent, unbiased advice to all Scottish residents, and will make sure that you understand all your options. Call one of the team for a free same-day meeting.

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Sharon McDougall


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