Write off unaffordable debt

Yes, however, your expected write-off amount will depend on your individual circumstances.

*The expected debt write-off figure of up to 70% is based on 1,671 Protected Trust Deeds currently administered by Trust Deed Scotland® and protected between 1 January 2023 and December 31 2023.

The expected write-off percentage includes the costs of administering each Protected Trust Deed (PTD). More information relating to the costs of administration can be found by clicking here. 

In this sample of PTDs, the expected write-off figure reaches as high as 84%. 226 PTDs or 13.5% of the cases have an expected debt write-off percentage between 70% and 84%. The average (mean) expected write-off is 51%.

Your decision to apply for a Protected Trust Deed should not be taken purely on a proposed debt write off amount alone. It is very rare for a Trust Deed not to be protected with Trust Deed Scotland® and we have one of the best protection rates in our industry, for example, in 2023, we achieved a protection rate of 98.6%, this made us the best performing volume provider of Protected Trust Deeds in Scotland.

Trust Deed Scotland® provide tailored debt advice on all available debt solutions in Scotland.

We make sure that our customers get personalised debt advice based on their affordability, lifestyle and needs. May not be suitable for all. Will affect credit rating.

To find out what your options are, simply complete our online form or just call us on 0141 221 0999.

As with all formal debt solutions in Scotland, the main downside for you will be how it affects your credit rating.

Having a Trust Deed will affect your credit rating for six years from the date the Trust Deed begins.

When borrowing money, credit reference agencies will assess the level of risk and base their decision on your financial history. This will include any defaults, whether you’re in a Trust Deed or used any other form of debt relief tool.

However, once your Trust Deed term has been complete and you have been discharged, you can then start to rebuild your credit rating and apply for a mortgage, credit cards etc.

While in a Trust Deed, you will make reduced monthly payments to your creditors, during which time you can get on with your life.

Before you commit to any Scottish debt solution, you would have a detailed call with an experienced debt advisor and the benefits and risks would be fully explained in the context of your own personal circumstances.

Every case is different to the next and with Trust Deed Scotland, you would receive tailored debt advice on what your debt repayment options may look like.

This is a common question that homeowners ask when they approach us for Debt Advice, and the answer in most cases is yes.

In a Trust Deed, your mortgage and car are protected so that you would continue paying them as normal – subject to approval, and completion.

If your house or car were at risk as a result of entering into a Trust Deed, we would look at the Debt Arrangement Scheme.

The people you owe money to are more formally referred to as your ‘creditors’. You, an individual who owes the money, is formally referred to as a ‘debtor’.

When you apply for a formal debt solution, creditor contact will continue for a while, but you will find that once you are approved for your chosen debt solution, contact will reduce and eventually stop over time.

You may still be contacted by the people you owe money to at any point throughout your chosen debt solution but it is usually nothing to worry about. You do not need to discuss anything with your creditors and if you do get contacted by your creditors – all you need to do is direct them to us and we will deal with them on your behalf.

The most common types of creditor contact after a debt solution has commenced are communications such as annual statements (your creditors are legally required to send these, but they are not a demand for payment and you can simply ignore them) and a document known as a Notice of Assignment. This is a letter to tell you that a debt has been sold to another creditor organisation. It is fairly common for companies to sell debts to other creditor firms known as ‘Debt Purchasers’. Debt purchasing is exactly as it sounds, essentially one company selling the debt you owe to another. This is most commonly done with credit cards and loans but can happen with other types of debt.

Again, this is nothing to worry about. The new creditor, or third party acting on behalf of the original creditor, is still bound by the terms of the Protected Trust Deed, Debt Arrangement Scheme or other formal debt solution. They cannot take any action to recover the debt and the Notice of Assignment is for information only. Should your creditors send you a Notice of Assignment letter, you would simply make us aware of it and our in-house team will make sure that our records are updated and that any future correspondence goes to the right people thereafter. It is also normal for the debt purchaser to write to us informing us of their purchase at the same time that they write to you.

Getting contacted by the people you owe money to can be a stressful experience, which is why we have a dedicated team available to help you with this specific issue, you should never try to struggle on without asking us for help, we’re here to help you throughout the period of your chosen solution. And, if you are not yet in a debt solution but would like to find out more about whether a debt solution is right for you, please contact us on 0141 221 0999 and speak to an experienced debt adviser in confidence.

With our insolvency industry experience, a fantastic rate of over 98% of our Trust Deed proposals are accepted.

If a creditor wanted to object, it would do so in writing within five weeks of your Trust Deed being proposed. Even then, it would only fail if that creditor represented over 33% in the total debt value or over one half in number. If 67% agree with the proposal, then the other creditors will still be legally bound by its terms, even if they object.

In the unlikely event that your Trust Deed did fail, your Trustee would negotiate your case in an attempt to have it accepted.

Remember other Scottish debt solutions such as the Debt Arrangement Scheme (DAS) and Sequestration can also be available.

Entering into Trust Deeds will not affect your partner or spouse unless you have joint debt together.

When you sign a credit agreement, because you have done so in your own name; your spouse or partner is not responsible to pay your debts. If you start a Trust Deed, your partner or spouse will not be directly involved with the agreement.

They will not be forced to help you repay your debt and your creditors are forbidden from revealing details of the debt to your partner/spouse unless given clear permission to do so by you.

If you’re a homeowner and your property is worth more than the amount owed on your mortgage, you may have to release some of its equity in order to proceed with a Trust Deed.

Mortgage equity is the difference in monetary value between what you owe on your mortgage and the current value of your property.  The equity value is fixed at the start of your Trust Deed, so if the value of the property should go up, it doesn’t affect the conditions of your Trust Deed.

Where you have negative equity or a low level of equity, a threshold is set where the equity figure can be ignored.

If there is significant equity in your home, you’ll agree with the Trustee how to deal with this in advance. You may, for example, extend the Trust Deed term from 48 months to 60 months.

Where you have a large amount of equity in your home and a Trust Deed is not your best option – the Debt Arrangement Scheme may be more suitable for you, as equity in your home is irrelevant.

Your debt adviser will discuss this with you, and if necessary, any equity arrangements will be organised before entering into a Trust Deed.

It is important to note that there are no fees for our initial debt advice and if you do not proceed with a solution there are no fees charged by us at all. Therefore, free debt advice is available from us, whether you choose to proceed with a debt solution or not. The tailored debt advice we offer aims to give you all the facts you need to make an informed decision on whether a formal debt solution is right for you. This will always be without obligation and completely confidential.

As with all Trust Deed and Debt Arrangement Scheme (DAS) providers, there are fees associated with these debt solutions. It is important that these fees are fully explained to you before you enter a debt solution. Our fee information page provides you with a detailed explanation of the fee structure for both Trust Deeds and DAS.

If you proceed with one of the two debt solutions provided by us (Trust Deed or DAS) then our fees are borne by your creditors and you will not pay anything over and above your one, affordable payment. That does not mean that your creditors pay our fees directly, the way it works is explained here.

Other formal Scottish debt solutions such as the Minimal Asset Process route to Sequestration (Scotland’s equivalent of Bankruptcy) exist without any fees whatsoever.

Your Trust Deed monthly payments are calculated using your disposable income. Your disposable income is a figure based on a deduction of your essential living costs and offsetting this against your income. The amount left over is the amount of money that you have left to pay your creditors.

When you apply for a Trust Deed in Scotland or Debt Payment Programme, your essential living costs include your priority debts such as your mortgage, or rent commitments and other priorities such as utility bills and council tax.

Allowances are given for childcare, travel expenses, car finance and other essential expenditures are included such as food and even lifestyle costs such as haircuts and hobbies. 

Entering into Trust Deeds or any other formal debt solution means that your monthly outgoings caused by unaffordable debt are significantly reduced, your new Trust Deed monthly payments are calculated fairly, alleviating the stress caused by debt.

The governing body for Trust Deeds is known as the Accountant in Bankruptcy (AiB). The AiB supervises all Trust Deeds however each Insolvency Practitioner is licensed by their own regulatory body.

Our Insolvency Practitioners are regulated by the Insolvency Practitioners Association.