Help for people in Scotland or near the border
IVAs aren't available in Scotland, but IndividualVoluntaryArrangements.net can still help you understand where you stand. We'll explain how a Protected Trust Deed compares with an IVA and with the other Scottish options, so you know what to look for when you speak to a Scottish adviser.
If you've recently moved, or you're about to move across the border, where you live when you apply decides which solution is open to you. We can help you make sense of that before you commit to anything.
When to get in touch
- You live near the border and aren't sure which rules apply
- You're moving between Scotland and England
- You want to understand how a trust deed compares with an IVA
A trust deed is a formal arrangement in which you sign over your financial affairs to a licensed Insolvency Practitioner, known as a trustee. If enough creditors don't object, it becomes protected, which makes it binding on all of them.
How a trust deed works
Advice and proposal
A trustee assesses your finances and draws up a trust deed with your monthly payment and term.
Protection
The trust deed is published, and creditors have five weeks to object. If not enough object, it becomes a Protected Trust Deed.
Monthly payments
You make affordable monthly payments, usually for around four years.
Discharge
When the trust deed ends successfully, the remaining balance of the debts included is written off.
Who is a trust deed for?
- You live in Scotland.
- You have unsecured debts you can't realistically repay in full.
- You have a regular income and can make an affordable monthly payment.
Things to consider
- A trust deed affects your credit file for six years.
- Your details appear on the Register of Insolvencies in Scotland.
- Homeowners may need to release equity.
- Fees are taken from your payments.
Alternatives in Scotland
The Debt Arrangement Scheme (DAS) lets you repay your debts in full over time with interest and charges frozen and legal protection, without the debt being written off. Sequestration (Scottish bankruptcy) and the Minimal Asset Process may suit people who can't afford to repay their debts. Free advice is available from Scottish advice services and MoneyHelper.
Live in England, Wales or Northern Ireland? See what an IVA is and how it could work for you.
IVA or trust deed: what's the difference?
| IVA | Protected Trust Deed | |
|---|---|---|
| Where it's available | England, Wales and Northern Ireland | Scotland |
| Typical length | Usually five years | Usually around four years |
| How creditors agree | Creditors vote; 75% by value of those voting must agree | Becomes protected unless enough creditors object within five weeks |
| Run by | A licensed Insolvency Practitioner | A licensed Insolvency Practitioner acting as trustee |
| Public record | Insolvency Register | Register of Insolvencies in Scotland |
The two solutions are similar in spirit: both let you repay what you can afford, with the rest written off at the end. The rules on how they're set up and how long they last are different, so you need to follow the system that applies where you live.
Moving between Scotland and England
Which solution is open to you depends on where you live and have your main connections when you apply, not on where your creditors are based or where the debts were taken out. If you've recently moved from Scotland to England, Wales or Northern Ireland, you may be able to propose an IVA. If you're already in a trust deed and move south, the trust deed continues. If you're planning a move, get advice before committing to either.
Where to get free help in Scotland
The Accountant in Bankruptcy is the Scottish government agency responsible for personal insolvency, and its website explains each Scottish debt solution. Free, impartial advice is available from Citizens Advice Scotland and through MoneyHelper. A good adviser will explain trust deeds alongside the Debt Arrangement Scheme, sequestration and the Minimal Asset Process.
How a trust deed affects your home
If you own your home in Scotland, the equity in your property is taken into account in a trust deed. The trustee may ask you to make a contribution from that equity, for example by remortgaging, or may agree to exclude the home in return for other payments. The approach varies, so make sure you understand how your home will be treated before you sign.
The Debt Arrangement Scheme explained
The Debt Arrangement Scheme, known as DAS, is a Scottish government scheme that lets you repay your debts in full over a longer period through a debt payment programme. Interest and charges are frozen and creditors can't take action against you while the programme runs. Unlike a trust deed, no debt is written off, but there's no insolvency record and your home isn't at risk. It's often a good fit for people who can repay in full given time.
What if creditors object to a trust deed?
If enough creditors object during the five-week period, the trust deed doesn't become protected. That means it isn't binding on creditors who didn't agree, and they can still take action. In that case, the trustee will discuss the options with you, which may include a different solution such as sequestration.
Talk to us about cross-border questions
If you live in England, Wales or Northern Ireland, or you're moving there, we can explain how an IVA would work for you. If you live near the border and aren't sure which rules apply, send us an enquiry using the form at the top of the page, and we'll help you understand where you stand.
For people in England, Wales and Northern Ireland, our guides to what an IVA is and IVA eligibility explain how the IVA system works. If you're comparing the two, those pages are a good place to start before we speak, and we'll answer anything they don't cover.