A brief guide to Trust Deeds - For residents in Scotland the alternative to an IVA is a Trust Deed, which is a totally different procedure, but, nevertheless a very successful and permanent method of sorting out a serious debt problem.

A Trust Deed is a document appointing a Licensed Insolvency Practitioner to deal with your financial affairs. By signing the document, you undertake to agree to a repayment proposal, under the guidance of a Trustee. The proposal can usually range for payment to your creditors of anywhere between10p to 100p in the £ over a set period (usually 3 years).

In return, you will receive protection from your creditors which may otherwise involve having your wages arrested, a poinding and warrant sale of your household goods as well as general pressure for payment from your creditors, through correspondence with legal threats and often late night phone calls at home.

The advantages of a Trust Deed are:

• It puts the debtor rather than the creditors in control of the situation.
• It releases you from the pressure of creditors.
• Your credit rating is not automatically affected by a Trust Deed.
• There is no court appearance and no adverts appear in local papers.
• You can hold a bank account and can continue to be self-employed.
• You retain household items and your car if this is required for work.
• It is a more flexible alternative to Sequestration.

Do I have to pay my debts in full? - Not necessarily. Remember a Trust Deed is an agreement with your creditors for repayment of a specific amount of your debt. Your Trustee will work out the value of any assets or an agreed monthly contribution and make a proposal to your creditors.