What is a Trust Deed?
Trust deeds work on a similar principle to IVAs in that they were implemented to
provide people with large amounts of unsecured debt they couldn’t manage, with a
less severe alternative to bankruptcy (or sequestration as it's known in Scotland).
The main difference between an IVA and a trust deed is the duration. In England
& Wales an IVA typically runs for 5 years and in Scotland, a trust deed is usually
in place for a period of 3 years.
Another key area that differs is the vote by creditors. With an IVA you need 75%
by value of your creditors to agree to your proposal before it can go ahead, with
a trust deed this figure is two thirds.
You must be resident in Scotland to be eligible for a trust deed; you can't apply
for one if you are normally resident in England or Wales.
Discover more information about the
pros
and cons of Trust Deeds.