In the article I’ll tell you about Protected Trust Deeds. A Scottish Protected Trust Deed is a formal, but voluntary type of debt relief in Scotland. It can be used by people who can pay something towards their debts, but cannot afford to repay them all within a reasonable time.
This can be appropriate for a number of reasons, such as you have lost control of what you owe, or because your circumstances have changed and you no longer can afford to pay what you used to.
To apply for a Your Debt Expert Protected Trust Deed, you must first speak with one of their licensed insolvency practitioners, who will draw up a finance plan with you. This will show how much you have coming in and what you have going out. From this they will work out how much disposable income you have, that is what you can afford to pay towards your debts, such as credit cards and loans.
Once they have done this, they will discuss all your options with you, such whether you can afford to repay your debts in full through a repayment plan or where you cannot afford to pay anything, in which case bankruptcy may be an appropriate solution for you.
If you can afford to pay something, but you cannot afford to repay all you debts a Protected Trust Deed may be a viable option.
Where it is a viable option, your trustee will make offers to your creditors, who get five weeks to agree or object to them. If less than a third of your creditors object, your trust deed will become protected. This means that you are legally protected from your creditors taking any enforcement action against you.
You will then normally make 36 monthly payments to your Protected Trust Deed, after which you will receive a discharge from your debts, meaning you no longer need to repay them.
Where you own a car, this can normally be disregarded up to the value of £3,000 providing you have a reasonable requirement for it. Where you own your own home, this can also normally be dealt with by a one off payment from a friend or family member of £500, where there is no or very little equity. Where there is more equity, your protected trust deed can be extended to allow you to pay it off. This means you can keep your home providing you continue to pay your mortgage and secured loans.
Protected Trust Deeds can damage your credit rating, but they are not as damaging as other remedies, such as bankruptcy.