Trust deed reform plan to address balance of rights

A SCHEME meant to help people deal with debts will be improved, the Scottish Government has said.

Ministers want to alter protected trust deeds (PTDs) following a consultation on how to balance the needs of debtors with the rights of creditors.

PTDs are voluntary agreements where a debtor offers to put what assets they can towards paying as much of their debts as possible for a fixed term.

When accepted by creditors, the deed becomes protected, interest on the debt is frozen and the debt cannot be pursued further through legal action.

PTDs are seen as a less severe form of insolvency and can be used to stave off bankruptcy, known as sequestration in Scotland, if the debtor complies with all of the terms.

Fergus Ewing, minister for personal debt and insolvency, said: “The Scottish Government understands that by enhancing the protected trust deed process to ensure it balances the needs of indebted individuals and their creditors, it will assist in the financial rehabilitation of individuals and help strengthen Scotland’s growing economy.”

New guidance and a revised structure for trustee fees are being proposed. A review board will be introduced and technical changes brought forward.

A total of 2,247 PTDs were awarded between January and April, up 10 per cent on the previous quarter and 43 per cent on the same quarter last year.