do we qualify for an IVA in scotland ?

[gillian.h]

Hi can you tell me if we qualify for an IVA in scotland. We have debt of £75,000

[Adam Davies]

Hi
You may qualify for a Scottish Trust Deed
Regards

[MelanieGiles]

A Scottish Trust Deed is similar to an IVA but with specific differences which I am learning as I have just become involved with Scottish insolvency work since 1 April 2008.

They are much simpler to propose than IVAs and only run generally for a three year period rather than five. Do you have any assets, such as equity in a property, cars, investments or shares which would also need to be declared?

[glen1971]

Hi gillian.h

I live in Scotland and am currently going through the application process for a Trust Deed. As Melanie has stated above they are not as complex as IVA's (Incidently Melanie's team are representing me and i can highly reccommend you contact her for a quick chat regarding your situation)once you have worked out all the debts you have and also calculated what you need to live on you are left with a surplus which will be paid to your creditors for 3 years, you may also need to release any equity in your property or any other valuable assets such as cars (if you need your car for work you are likely to be allowed to keep it) When all of the above is agreed you sign the agreement which means you have been granted a trust deed. Your name is entered in the Edinburgh Gazette (a financial publication not a local paper!) and your creditors have 5 weeks from the publication dated to object against the trust deed. In your case with £75k of debt you need 66% of your creditors debt in value (around £50k) to either not vote/object or 50% or more of the total creditors not to object for the trust deed to become "Protected" and thus everything is agreed. It is a simple process and the IP will even come to your house to agree everything in a non judgemental and sympathetic way.

It is always best to speak with a proffesional and they can be more specific to your situation.

Best of luck.

[size5]

The generally accepted level of contribution to be realised for the creditors can also start from as little as 10p in the pound, rather than the generally accepted figure in IVA's of 25p in the pound. Each case is to be considered on its merits of course, but it is certainly another string to the bow, so to speak.

Regards.

[bigpete]

Hi gillian.h
A bit about a Scottish Trust Deed:The chances of a Scottish Trust Deed being successful is higher than an IVA - maybe it's because the creditors are more likely to get their money within three years instead of five long ones - when a lot can happen (is it 26% of IVA's fail during their term because of difficulties by the debtor?; loss of job and it's said apathy of the debtor living on a pittance for a long 60 months?). After paperwork has been signed, your IP will put together copies for the creditors, a notice will appear in the 'Edinburgh Gazette' (don't panic it's not like the national press or your local paper -the Gazette is the 'Official Journal of Scotland' published twice weekly on Tuesday and Friday) a copy of this notice will also be sent to all your creditors, and also a set of the same to you. Although it says 'Bankruptcy' - it's not but comes under that legislation, like this:
"[Trust Deed Bankruptcy (Scotland) Act 1985 Section 5, paragraph 5(3)Trust Deed for Creditors by

'ANGUS BLOGS'

A Trust Deed has been granted by Angus Blogs, 100 Any Street, Anytown, BB678 9YT, on (date), conveying - to the extent specified in Section 5(4A) of the Bankruptcy (Scotland) Act 1985) (his/her) estate to me, (name and address of IP) as Trustee for the benefit of (his/her) creditors generally.

If a creditor wishes to object to the Trust Deed for the purposes of preventing it becoming a protected Trust Deed (see notes below on the objections required for that purpose) notification of such objection must be delivered in writing to the Trustee within 5 weeks of the date of publication of this notice in The Edinburgh Gazette.

Notes: The Trust Deed will become a protected Trust Deed unless, within the period of 5 weeks of the date of publication of this notice in The Edinburgh Gazette, a majority in number or not less than one third in value of the creditors notify the Trustee in writing that they object to the Trust Deed and do not wish to accede to it.

The effect of this is that paragraphs 6 and 7 of Schedule 5 to the Act will apply to the Trust Deed Briefly, this has the effect of restricting the rights of non-acceding creditors to do diligence (i.e. to enforce court decrees for unpaid debts) against the debtor and confers certain protection upon the Trust Deed from being superseded by the sequestration of the debtor’s estate...]"

Copies are also sent to the 'Accountant in Bankruptcy' (AIB). You now sit and wait patiently for the five weeks to complete and then you will be notified whether or not the Trust Deed was objected to, the IP hears this via the AIB then tells you. If they have not received objections then your 'Trust Deed' becomes a 'Protected Trust Deed' and the creditors can no longer chase you, interest is frozen and it's 34 and a bit months to go. However, if the Trust Deed is objected to by over a third in value and fails you are not 'protected' you still have to abide by the terms/payments set out in the Trust Deed but your creditors are still able to chase you - but this would be quite unusual and I am sure your IP would not propose the Trust Deed if there was any chance of this happening. But as Melanie has said before; Trust Deeds usually run for three years only, and if rejected by creditors result in immediate sequestration - a form of bankruptcy whereby you also pay for three years.

Don't know if you have any equity in your house? but the value of the house is taken at the start of the Trust Deed and the equity is worked out at that date, and released by remortgage in the third year, unlike an IVA.. It's a chance you take but there are very good IP's in Scotland. Very little is mentioned about Scottish Trust Deeds; put in "Individual Voluntary Arrangement" into Google (UK only) and it comes up with 111,000 pages.. put in "Scottish Trust Deed" and we get just; 83 'nough said!.

To get more advice, and possibly take you on - I recommend you contact ThomasCharles on this Forum - they were extremely helpful to us - they are based in England, and will prepare your case and will pass you onto excellent IP's up here in Scotland; where she/he will visit you for a face to face meeting..