1. A Trust Deed is an insolvency procedure and apparent insolvency is constituted by virtue of you signing the Trust Deed.
Once an individual has signed a Trust Deed and provided all the information and documents requested, we will immediately place notice of the Trust Deed on the Register of Insolvencies and work towards getting the Trust Deed protected. Unless we receive relevant objections from the creditors involved in the case within 5 weeks of the date of publication of the Trust Deed in the Register of Insolvencies, we will send the relevant documents to the Accountant in Bankruptcy who will update the Trust Deed in the register of insolvencies as being protected.
The Trust Deed has protected status from the date on which the Trust Deed is updated by the Accountant in Bankruptcy in the register of insolvencies. If the Trust Deed fails to achieve protected status, an individual may present an application to the Accountant in Bankruptcy for their own sequestration, and we will provide the necessary assistance in this regard.
3. We have an ethical requirement to maintain independence throughout the term of the Trust Deed and my duties, as Trustee, While we will take all reasonable steps to act in your best interests, my primary duty under the terms of the Trust Deed, is to act for the benefit of your creditors.
4. It is intended that the Trust Deed will run for an agreed period, on expiry of which we will take the necessary steps to complete my administration and, assuming that there are sufficient funds available, make a distribution to your creditors. In the event that any points pertaining to your insolvency are unresolved upon the expiry of four years from the date your Trust Deed was signed, in particular unrealised assets or unpaid contributions, we will be unable to issue your discharge from the Trust Deed until such time as these issues have been finalised.
5. You will be required to make a contribution from your surplus income for an agreed period.. Your contribution will continue to reflect your income throughout the term of your Trust Deed and will therefore be reviewed periodically and may be varied if your circumstances change. You should notify us immediately of any material change to your financial circumstances, including any salary increases, bonus or overtime payments received, as these may require to be remitted to me for the benefit of your creditors. Similarly, you should notify us immediately if you are unable to make a contribution in any given month. Should your contributions not be maintained in line with our assessment, the trustee will consider the uplift and sale of any motor vehicle you own.
6. Paragraph 15(2) of the Trust Deed states that your Trust Deed may be terminated in the event that contribution payments are not received from you for a period of three consecutive months. For the avoidance of doubt, the termination of your Trust Deed would remove the protection offered to you by virtue of the Trust Deed from your acceding creditors.
7. All of your estate, including your heritable property, policies, shares and ISA’s, shall be conveyed to us and any value or equity therein may require to be realised by us for the benefit of your creditors. We shall write to the appropriate company to determine whether there is a value to any life insurance policies. Should it transpire that there is a current value, we shall take steps to realise this sum. Should any lump sum payment (including any death benefit) or dividend payment be payable during the term of the trust deed, such payments will be paid to us. Should the policy company make any payment directly to you during the term of the trust deed, in error, you will be required to reimburse the trust deed estate for payments received.
You will have various options available to you to relinquish our interest in any assets that you own. Your options include payment from a third party, either in a lump sum or instalments over the course of the Trust Deed, equivalent to the asset values. You could obtain a remortgage at the end of the Trust Deed period to make the required payment. Alternatively, you can agree to policies being surrendered or the sale of your property. The property could also be sold to a social landlord who would rent the property back to you, if you do not wish to sell the property and are eligible to apply for the Mortgage to Rent scheme.
8. You must fully disclose information about your assets and financial circumstances. It is an offence to make false representations, to conceal assets or to commit any other fraud for the purpose of obtaining creditor approval to the Trust Deed. In addition, it is an offence to conceal any assets that you acquire prior to you obtaining your discharge from the Trust Deed. You must notify us immediately of any assets that you acquire during the term of your Trust Deed, for example, redundancy payments, inheritances or gifts. Such assets will be conveyed to me as your Trustee and we shall require to realise them for the benefit of your creditors.
9. By virtue of the Trust Deed, you have an obligation to co-operate with us in all matters pertaining to your insolvency.
10. Our fee will be met from funds held by us in relation to your contribution payments and the realisation of any assets currently owned by you or subsequently acquired by you during the term of your Trust Deed.
11. Once the Trust Deed is signed, you must not continue to make payment to any debt advisors or their equivalent in respect of an arrangement entered into before the Trust Deed was signed.
12. A notice of Trust Deed will be registered in the Register of Inhibitions and
Adjudications. If you require any further information regarding this, at any time during the course of your Trust Deed, please do not hesitate to contact this office.
13. You may encounter difficulty if or when you attempt to obtain credit, including after the date of your discharge. Although the signing of a Trust Deed does not prevent you from obtaining credit, we would suggest that you carefully consider the financial commitment before doing so, as any repayments to such additional credit will not be taken into account when conducting any future review of your financial situation and level of contribution to be paid.
14. The granting of a Trust Deed may damage your business interests or employment prospects. It is your responsibility to ensure that your employment is not affected by the signing of a Trust Deed. It is recommended that you review your contract of employment carefully in this regard.
15. Unfortunately, you may find that you continue to receive letters from your creditors, or agents acting on behalf of your creditors, for a number of months after you sign the Trust Deed. Please send any additional correspondence you receive from your creditors to this office after the Trust Deed has been signed. We confirm that all creditors that you advise me of will be contacted and notified of my appointment.