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If you are in debt and need help, you may be researching IVAs as a potential solution. A Protected Trust Deed, (the Scottish equivalent of an IVA) could help you write off unaffordable debt. Find out how below.
If you would like a no obligation, confidential chat with a debt advice expert – you can contact our team on 0141 846 5065 or book a callback here.
What is an IVA in Scotland?
An IVA (Individual Voluntary Arrangement) is a debt solution exclusive to residents of England, Northern Ireland, and Wales. If you are a resident in Scotland (or have been in the last 12 months) the equivalent debt solution is a Protected Trust Deed.
How could a trust deed help you?
Trust Deeds are designed to help you reset your debt by:
- Enabling you to only pay what you can genuinely afford towards your debts.
- Freezing interest & charges to ensure you aren't stuck in a continuous debt loop.
- Writing off the remaining debt after the trust deed is complete (usually 48 months).
When considering a trust deed, our professional money advisers will take your through a budgeting exercise to find what you can realistically afford to pay to your creditors. If your assets are likely to be affected, your money adviser will let you know. Once you're in a protected trust deed, you will be legally protected from any further action by your creditors to recover the unsecured debt owed to them. The Cleanslate team will contact your creditors to inform them you are now in a Protected Trust Deed.
What’s the difference between an IVA and Trust Deed?
While a trust deed is the Scottish equivalent of an IVA – there are some core differences to be aware of.
| IVA | Trust Deed |
|---|---|
| Where | |
| England, Wales & NI | Scotland |
| Minimum Debt Level | |
| No Minimum | £5,000 |
| Maximum Debt Level | |
| Unlimited | Unlimited |
| Typical Duration | |
| 5 years | 4 years |
| Debt Types Covered | |
| Unsecured Only | Unsecured Only |
| Is Interest Frozen? | |
| Yes | Yes |
Where and When You Can Get an IVA or Trust Deed
IVAs are available to residents of England, Wales & Northern Ireland. Protected Trust Deeds are available to residents of Scotland. You may also be eligible for a Protected Trust Deed if you live outside Scotland but have lived in Scotland within the last 12 months, or own a business in Scotland.
How Much Debt does an IVA and Protected Trust Deed Cover?
There is no maximum amount of debt for either an IVA or Protected Trust Deed. To apply for a Protected Trust Deed, you must owe a minimum of £5,000 to your creditors. There is no minimum debt level to enter an IVA.
Is there a difference in how long an IVA or Trust Deed lasts?
On average an IVA typically lasts five years and a Protected Trust Deed typically four years. This duration may be longer depending on your circumstances and the level of your debts.
How much debt is written off at the end of an IVA or Trust Deed?
Once successfully completed, any remaining debt agreed within your IVA or PTD will be written off.
Is there a difference in the types of debt covered by IVAs and Trust Deeds?
Both IVAs and Trust Deeds will only include unsecured debt.
Do I pay interest in an IVA or Protected Trust Deed?
Both Trust Deeds and IVAs freeze interest and charges on the debts they cover unless your circumstances change and you can afford to repay your debt in full. In a Protected Trust Deed, if you are able to repay your debts in full, then Trustee’s fees, outlays and statutory interest also apply.
Learn if a Protected Trust Deed is For You
At Cleanslate we have a team of expert money advisers ready to help you find the right debt solution for your personal circumstances. If you are in debt and need help, call us now for a confidential, no obligation conversation to find the right solution for you.
