Because a Trust Deed (TD) is a formal legal agreement, you cannot set one up on your own. You need an Insolvency Practitioner (IP) licensed in Scotland to help you.
The best way to implement a TD is to first speak to BeatMyDebt.com who will look at your circumstances and help you decide which debt solution is right for you. If you have decided that a TD is for you, we will introduce you to an IP in Scotland.
Identify your Insolvency Practitioner
If it is decided that a Trust Deed (TD) is the right solution for you, Beat My Debt will be able to recommend an Insolvency Practitioner (IP) who is either local or experienced in dealing with the special circumstances of your situation.
For example, if you are self employed, you will normally need to use an Insolvency Practitioner who has experience of working with self employed people.
If you want to find your own insolvency practitioner , you can do so. The easiest way to do this would be to search for local insolvency practitioners in your area on the internet. However, taking the recommendation of Beat My Debt will mean that you will be working with an IP who is approved by Beat My Debt and experienced in dealing with people with your kind of debt problems.
BMD Tip: Once you have identified your Insolvency Practitioner, they or one of their representatives will need to meet with you in your home. During this meeting they will discuss your financial situation with you and make sure you understand what a TD will mean for you.
Do you want help to start a Trust Deed? Give us a call on 0800 077 6180 or complete the form below to speak to one of our experts
Trust Deed proposal drafted and signed
If after you have met with the insolvency practitioner you agree that you want to continue with the Trust Deed process they will then draw up a proposal on your behalf. This document details all of your financial circumstances. You will be asked to sign this document.
BMD Tip: Once you have signed your Trust Deed proposal it is important to understand that at that point you become legally bound to its terms. From that point you agree to legally transfer all of your significant assets (generally your property) to your Insolvency Practitioner who could then subsequently sell them to help repay your creditors.
However at this point your creditors are not yet legally bound to the agreement and could still take legal action against you.
If you are a home owner your assets will normally include 100% of the equity you own in your property at the time the Trust Deed document is signed. They may also include an expensive car, investments, and any other significant assets. However normal household items such as fridge freezers and washing machines are excluded.
Trust Deed advertised
Following the signing of the Trust Deed proposal, the Insolvency Practitioner will advertise your Trust Deed in the Edinburgh Gazette. This is a Government publication subscribed to by solicitors, accountants, banks and various other financial institutions. It is not generally read by the public.
Once the advertisement has been placed, the Insolvency Practitioner will then write to your creditors and send them a copy of your proposal detailing your financial circumstances, explaining the Trust Deed process and setting out the likely amount that they will be paid over the lifetime of the Protected Trust Deed.
Creditors have 5 weeks from the date of the advertisement to agree or object to the Trust Deed.
Trust Deed protected
Provided that no more than one third in value or a majority (50%) in number of your creditors object to the terms proposed within the five week period, the Trust Deed will become “Protected”, binding all creditors to its terms.
BMD Tip: Although it is commonly referred to as a Trust Deed once your creditors have agreed to the arrangement it is formally known as a Protected Trust Deed. This means that all creditors are bound to its terms (whether they accepted or rejected it) and that none can take any kind of recovery action against you.
What if my Trust Deed is rejected?
Although there cannot be a 100% guarantee it is unlikely that your Trust Deed will be rejected. Your insolvency practitioner will advise you as to the likelihood of acceptance and will not normally proceed with the application if they are not confident of success.
In the unlikely event that your trust deed is rejected you are returned to the position that you are in now. You will not be forced to go Bankrupt. You may then choose to consider a Debt Arrangement Scheme (DAS) or make a new Trust Deed proposal which addresses your creditors concerns.
Arrange a call with a Trust Deed Expert
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