While the situation can be so very similar for many across the UK, the IVA laws in the England, Ireland and Wales are different from the Scottish arrangement.  Scottish law does not allow IVAs, but it does offer protection using a Trust Deed, also known as a Protected Trust Deed.  So what are they?

They are very similar in style and characteristics to the IVA which has become so popular in other areas of the UK.  A Trust Deed would require a Trustee to be appointed to first of all consider your situation and see if there are any alternatives to a Trust Deed.  If in their opinion there is no other option the Trustee would then set about contacting all of the client’s creditors to inform them that a Trust Deed is being considered and would they consider a specific payment plan for the debtor.

The vast majority of creditors will agree to a Trust Deed because for many it is the only way of getting any return out of a difficult situation.  If the customer was forced into bankruptcy, then the return for any creditors would probably be substantially less that that for a Trust Deed arrangement.  While there have been suggestions that Scottish law would be amended to fall into line with the rest of the UK, this seems highly unlikely – especially if, as many suggest, Scotland declares independence at some point in the future.  A Trust Deed needs to be approved by a court of law, and is legally binding.

For those who live in Scotland and feel that they may need to consider a Trust Deed, do not be alarmed by the difference to the more traditional IVA.  They still offer very solid legal protection from creditors, so long as you abide by your payment plan.  For many people they can be a life saver and often signal the end of a difficult period in their financial lives.