Scottish trust deeds
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Over the next few months, and possibly years, for some people in Scotland the subject of Scottish protected trust deeds will come to the fore. While there are signs that the worldwide recession, which began in 2007, is coming to an end, this will not automatically see an immediate improvement in the financial position of literally hundreds of thousands of people across Scotland.

Financial problems across Scotland

While initially the Scottish economy had seemed to perform better than the rest of the UK, of late we have seen a dramatic demise in the health of the Scottish business arena. When you consider various job losses in the drinks industry together with the demise of the various Scottish banking operations it will perhaps be no surprise to learn that Scottish unemployment has increased and will continue to do so for some time yet.

Debt troubles in Scotland have pushed more and more families and businesses to the brink of financial ruin although individuals who are experiencing acute financial problems do have options available.

Taking advice regarding financial problems

If you sense that your financial situation is worsening by the day or indeed you forecast turbulent times ahead then you should take professional financial advice as soon as possible. Protected trust deeds are only one of a number of options available although they do offer the opportunity to avoid bankruptcy yet cap your debts while paying off as much as you physically can. They are legally binding arrangements which need the acceptance of the majority of parties involved and can very often take pressure off your personal life and indeed put you back on a more sound footing.

Do I need a protected trust deed?

There are certain elements of your financial affairs which may ensure that you qualify for a protected trust deed although as we suggested above, it is vital that you take professional advice to ensure that you take the best course of action. A Scottish trust deed is very similar to an Individual Voluntary Arrangement in the rest of the UK and ultimately ensures that your financial situation will not worsen in the short term.

The legal status of a protected trust deed

A protected trust deed, if this is the correct path for you, would be arranged by an authorised insolvency practitioner who would help you formulate a detailed list of your financial affairs. After considering your debtors, creditors, your income and your cost of living the insolvency practitioner would be able to put together a proposal for your creditors.

The proposal would be sent to each of your creditors together with various comments on your financial situation. Under the laws for protected trust deeds in Scotland, a non-reply from a creditor is deemed to be an acceptance of a proposal and as long as no more than one third of the total debt is rejected by creditors the scene is set to put a protected trust deed in place.

Abiding by your trust deed

Once your trust deed is in place it will be monitored and administered by your appointed authorised insolvency practitioner who will have an obligation to not only to his client but also the creditors. If your financial situation changes, for the better or for the worse, you need to contact your trust deed administrator and let them know exactly what has happened and how this has affected your financial situation.

If your income has increased it may be that the administrator would look to increase your payments although if your income has fallen it may be that your monthly payments will be reduced. If for some reason you are unable to pay anything towards your outstanding debts (with the traditional agreement lasting for 36 months) your adviser may suggest looking towards the bankruptcy route.

Learning from your experience

While record numbers of Individual Voluntary Arrangements (IVAs) and protected trust deeds are being authorised throughout the UK these arrangements should not be seen as a quick fix or an excuse to overspend in the future. While after the 36 month period your outstanding debts will be written off it is vital that you learn to budget for the future and ensure that you do not fall into the same trap yet again. Whether your creditors would be so understanding if you were forced to apply for a protected trust deed again at some point in the future is something which you need to consider and something which is very much debatable.

Can financial distress affect your health?

While the vast majority of people in the UK who are falling into financial distress will no doubt try to carry on for as long as possible, there is medical evidence to show that increased stress does affect your health, both mental and physical. While we tend to value arrangement such as trust deeds and other debt instruments in pounds and pence financial problems can often lead to more serious and potentially life changing situations.

There is evidence appearing everyday that continued financial problems do impact upon personal relationships, family life and ultimately your well-being. If you feel that the financial pressure and financial stress is getting too much then it is essential that you do take professional financial advice from a debt adviser as soon as possible. Burying our head in the sand, in the hope that it will all go away, is something which many of us do but ultimately live to regret.


Protected trust deeds in Scotland are there for a reason and if you are suffering financial distress or can see your situation moving that way then you need to make use of this process. A trust deed is not an easy way out, it is not a signal of defeat but ultimately it is a sensible option if you are unable to finance your debts. Do not be afraid to take advice at the earliest opportunity to reduce the impact upon your life and your financial situation as much as possible.

If you take advice early enough it may be that your debts can be rescheduled without applying for a protected trust deed or even bankruptcy although this is something that you should consider and discuss with a professional debt counsellor. Taking control of the situation is the first stage in the recovery process and something which you should consider at a very early stage.

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