Scotch Mist, Protected Trust Deeds and the Loch Ness Monster
One debt remedy which attracts such myths is a Scottish Protected Trust Deeds, with some of the myths being as legendary as the Loch Ness Monster – and about as likely. They are often portrayed as part of a new Government Scheme which is designed to let you off scot free from paying your debts. This isn’t true although they do try and provide some relief to debtors who are struggling to repay their debts.
The problems with such myths, however, is they make us naturally cynical and we start believing that if anything sounds too good to be true, it must be. In some situations this means we ignore genuine solutions that could help us.
So what is the truth about Trust Deeds?
A Trust Deed is a formal legal remedy that is available to Scottish Debtors to deal with their debts. Historically, they have existed for centuries and one of the most famous Scots ever to sign one was the renowned Scottish author, Sir Walter Scott.
Legally they were based in common law and allowed debtors to voluntary agree a deed with their creditor that allowed their debts to be repaid in full or part and were traditionally used to avoid formal bankruptcy.
In 1985, however, a new type of Trust Deed was created and this became known as the Protected Trust Deed. Essentially this was the same as the older trust deed, but allowed deeds to formally become protected by law after five weeks.
This protected the debtor from further enforcement action and allowed them to have the remainder of their debt written off after the agreed period was completed. It also allowed debtors to bind their creditors to its terms, whether they agreed to it or not providing a proportion of creditors agreed.
Last year over 9,000 Trust Deeds were signed and became protected. The vast majority of them required debtors to pay what they could from their disposable income for three years, after which the rest of their debt will be written off.
To sign a Trust Deed a debtor must appoint a licenced insolvency practitioner (Trustee), who will advise the debtor on all their options. This is to ensure that it is the correct option for them. They will then assist them to draw up proposals which they believe the debtor’s creditors will accept.
It’s not true that if you sign a Trust Deed you will lose your home and car, but it is important you get advice on this from your trustee before you sign anything.
At the end of the Protected Trust Deed the debtor receives a discharge from having to repay back the included debts.
Now if you think that is Scotch mist you would be wrong, but if you’re seriously considering a Protected Trust Deed you must first seek out expert advice from a licenced insolvency practitioner.