Getting A Scottish Trust Deed Protected
The Protected Trust Deed regulations have been significantly amended effective November 28, 2013. Consequent to this amendment the trust deed gains protected status from the date on which it is registered with the ROI (Register of Insolvencies) by the AiB (Accountant in Bankruptcy). Earlier a waiting period of 5 weeks from the date of notification to creditors was prescribed before a trust deed could attain protected status. However, the amendments also stipulate conditions that must be complied with to attain the protected status. The following are among the Azuraytech conditions:-
The trustee and the debtor should be eligible to enter the trust deed. Corporate bodies and trusts are also eligible debtors. The minimum debt should be over £5,000 on the date of signing the deed.
The debtor and trustee must sign a statement confirming that the debtor was provided prescribed advice by the trustee and the debtor should signify vesting of acquired with the trustee.
Contribution taken from the debtor’s income should be payable for 48 months which is the new payment period prescribed as against 36 months that existed earlier, except when the period is varied. Moneys derived from social security benefits cannot be included. When a debtor can pay his debts in entirety within 48 months from his income contributions, the protected status will not be available and the government considers the DAS scheme to be more appropriate in such circumstances due to policy reasons.
Certain information must be sent by the trustee to the creditors following the initial notification in the ROI and the creditors will then have the opportunity to convey their objection to the protected status within 5 weeks. Such objections shall be valid only when majority by numbers or one third in value object to the proposal. Secured creditor of excluded dwelling house is barred from voting for this purpose.
Upon expiry of the notice period to creditors, the trustee shall provide the AiB with certain information for the deed to gain protected status. When certain conditions are complied with the AiB does not hold discretionary powers over registering the deed.
Subject to conditions, the Protected Scottish Trust Deed may exclude a dwelling house and these conditions include (a) The secured creditor and the debtor are provided with a valuation by the trustee (b) secured creditor must agree to waive any claim on the PTD for the whole or part of the debt owed. (c) The AiB should be informed and (d) information should be given to unsecured creditors on (i)how any excluded dividend would affect the PTD (ii) Value of the dwelling house excluded from the PTD (iii) The amount of debt due to the secured creditor.
Notwithstanding the changes, the basic character of the PTD continues to remain the same. Creditors are barred from taking action during the pendency of a PTD and secured creditors after agreeing that the dwelling house can be excluded from the PTD cannot petition for sequestration nor move against the trustee
In addition to the above, some of the powers enjoyed by the trustees hitherto have been pruned and much of the discretionary powers vested in the hands of the AiB.