A Trust Deed is similar to an IVA (Individual Voluntary Arrangement)

• In most cases the term of the Trust Deed is three years.
  
  
• Creditors must stop interest and charges
  Creditors are not allowed to apply interest and charges to your accounts by law.

• Halts Court action
  A Trust Deed stops any court action pending and any visits from Sheriff Officers.

• The Trustee, or Insolvency Practitioner, helps you to prepare the documents needed to start the Trust Deed.

• The Trustee will arrange a meeting with you to go through all of the details and to sign the Trust Deed.

• If two thirds of the creditors agree to the proposals, then the Trust Deed will go ahead.

• As long as you maintain the payments to your Trust Deed, then your debts will be cleared in three years.

Advantages of a Trust Deed over Sequestration

• Debts are frozen at the date you sign the Trust Deed. Creditors should direct correspondence to the Trustee rather than you.
• You can still have a bank account. This is usually an instant access type account where you can use a cash card but no cheque book, cheque card or overdraft facility. We have a list of instant access bank accounts that may be suitable.
• Any monthly payment based on your earnings may be increased or decreased if your circumstances change.

Restrictions of a Trust Deed

• You cannot take out credit over £250 during the Trust Deed period.
• Only the creditors who agree to the terms are bound by the Trust Deed. Those not agreeing can still carry out various forms of enforcement available to them, including petitioning for your bankruptcy.
• If you do not cooperate with the Trustee, they can try to make you bankrupt
• You cannot be a director of a limited company.

The Trustee must be a qualified Insolvency Practitioner. 

Protected Trust Deed

Providing it meets certain conditions, a Trust Deed may be recorded in the Register of Insolvencies as a Protected Trust Deed. This prevents the creditor from making you bankrupt so long you stick to the terms of the Trust Deed.