The Trust Deed In Scotland Drives Growth In Personal Insolvencies

The Trust Deed In Scotland Drives Growth In Personal Insolvencies
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Scotland is seeing an increase in the number of bankruptcies and personal insolvencies. Experts link the 20.5% increase in personal insolvencies to strong growth in trust deeds in Scotland. Entering into a protected trust deed in Scotland is one way to avoid filing for bankruptcy through a less severe form of insolvency.

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Personal insolvencies and bankruptcies in Scotland on the rise

According to the BBC, Scotland’s Accountant in Bankruptcy reported 4,862 bankruptcy awards in 2018-2018. That represents a 5% increase from 2017-2018. The number of protected trust deeds increased 20.5% to 7,917 in 2018-2019 from 5,958 in 2017-2018. The BBC adds that the increase in approved debt payments is part of the Scottish government’s plan to enable people to “get back on track without entering insolvency.”

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The news outlet reports a 9.7% increase in payment programs under the Debt Arrangement Scheme (DAS), which increased to 2,544 in 2018-2019 from 2,318 the year before. There were 1,687 DAS programs finished this past year, which represents only a small increase from the 1,681 programs that were completed the year before. Scots repaid £37.1 million through the DAS scheme over the last 12 months, which is a small decline from the £37.6 million that was repaid the year before.

According to Press Association Scotland (via Yahoo! News), the number of protected trust deeds increased 32.9% year over year, while personal insolvencies increased 29%.

Jamie Hepburn, business secretary for the Scottish government, said the numbers show more and more Scots are "experiencing increased financial pressures," especially amid the continuing uncertainty around Brexit and the roll-out of Universal Credit.

How a trust deed in Scotland works

The trust deed in Scotland was included in revised legislation in 2013 to help Scots who struggle to pay back their debts. Once the scheme is in place, debtors make affordable payments toward their debts for a set timeframe, usually four years. Debts who fulfill all parts of the plan under the agreed terms will no longer be responsible for any leftover debt.

Debtors who are interested in entering into a protected trust deed begin the process by nominating an insolvency practitioner, who then notifies the Accountant in Bankruptcy of their plan. After going through their financial statements and calculating the amount that can be paid each month, the AiB enters the details of the agreement into the Register of Insolvencies.

The practitioner then notifies all of the debtor's creditors with details of the plan, including assets that are excluded from the arrangement and other details. Creditors have five weeks to officially object to the plan. If the AiB approves the arrangement and enough creditors agree to it, then it will be recorded in the Register of Insolvencies. As long as the debtor completes their obligations under the plan, their debts will be discharged at the end of the period.


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Michelle Jones is editor-in-chief for and has been with the site since 2012. Previously, she was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses. Email her at
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