we live in Scotland

[dawn.e]

Hi, I am new to all this and at the moment am trying to remortgage to try to avoid this route however it looks grim, my question is do I have to include all of my unsecured credit on an IVA or can I choose to keep paying 1 or 2 things at the proper rate. I have a huge unsecured bank loan and really am not sure I want to include it as it is for lots of money, also my husband needs a credit card for his work overseas and therefore we would need to keep this as it is and not include it as it would (from what I can tell) be frozen. Also as we live in Scotland would it be best to go for the Scottish equivalent of the IVA? Thank you, Dawn

[MelanieGiles]

Hi Dawn

As you are living in Scotland you cannot propose an IVA, but can propose a Trust Deed - which are similar but not completely identical.

You will need to include all of your creditors into the Trust Deed. Your husband may be able to retain one card for business use, providing the card company agree to this, and the balance is paid off every month when he receives his salary. A better alternative would be to ask his employers for an expenses float, and put this onto a pre-paid credit card.

[bigpete]

Hi Dawn.e
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..

[Jo Rolland]

Dawn, if you are thinking of entering a Trust Deed, you should not proceed with any remortgage just now. Firstly speak to someone regarding a Trust Deed, if you have equity in your property, you will be required to realise this to your creditors so therefore you should put any remortgage on hold until you have the appropriate advice.


Edited to say, regarding the previous poster, the equity is not necessarily dealt with in year 3, it can be dealt with immediately.

[Adam Davies]

Hi
Jo is an expert in this area and well worth a chat with
Regards

[MelanieGiles]

Just to echo Andy's advice - Jo is a very experienced debt counsellor north of the border, sho I have worked with on many occassions. She will give you no-nonsense honest advice about all of your options.