Types Of Bankruptcy

Many people living in Scotland today will be struggling with this very question. Should they petition for bankruptcy, or Sequestration as the Scots call it, or instead opt for a Protected Trust Deed, which is an alternative debt solution available in Scotland for people who wish to avoid bankruptcy.

They will be trying to evaluate the benefits of one when compared to the other, whilst considering the pitfalls of both.

There are many reasons why someone might prefer to avoid being made bankrupt, even when it would undoubtedly be the easiest, fastest and the cheapest way out of debt.

It maybe that they have an occupation or profession that prohibits bankruptcy as an option, such as The Police Force, Prison Warden, Lawyer, Accountant or a member of the Armed Services to name a few.
Or it may be purely a matter of personal preference, that if bankruptcy can be avoided it should be. But, whatever the reason, the decisions that need to be made can still be difficult to make.

The Protected Trust Deed allows people a chance to propose a structured and legally binding agreement to their creditors. As in bankruptcy, the Protected Trust Deed provides a fixed term repayment plan to creditors, which is normally set to 36 months, with payments based on affordability after all the modest needs of the applicant have been deducted from his income.

It also leaves the applicant completely debt free once the Protected Trust Deed has successfully concluded, with any unpaid balances being legally written off.

Unlike bankruptcy, however, the Protected Trust Deed remains a private agreement and, although the Protected Trust Deed is listed on the Insolvency Register in Scotland, it will not appear in the local press.

Because the Protected Trust Deed is a legally binding agreement, once accepted by the required majority of creditors to gain its approval, it becomes legally binding on all of them, forcing them to stop adding interest to the outstanding balances whilst the agreement is in place.

Similar Posts:

• Avoid Bankruptcy with an IVA
• ‘IVA’ the alternative to Bankruptcy
• Do all my creditors have to agree to my IVA?
• Bankruptcy Blog Reader’s Question: Which Is Better – Deed For Lease Or Mortgage Modification?
• Fitch downgrades Royal Bank of Scotland and Lloyds Banking Group

Tags: Deed, Protected Trust, Protected Trust Deed, Trust Deed