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Reform of Protected Trust Deeds 03/09/2013 New regulations have been laid in the Scottish Parliament, aimed at improving the transparency of Protected Trust Deeds and addressing the disparity between costs and returns.

Reform of Protected Trust Deeds

New regulations have been laid in the Scottish Parliament, aimed at improving the transparency of Protected Trust Deeds (PTDs) and addressing the disparity between costs and returns.

It follows Scottish Government concerns about the performance of PTDs – because more than a third of all PTDs pay no dividend at all to creditors.

The new rules will:

  • Introduce a minimum debt level of £5,000,
  • Make a trust deed ineligible to be protected if the debtor’s total debts can be repaid, in full, within a 48 month period,
  • Exclude pre-trust deed fees, such as fact-finding fees, so that these can no-longer be charged separately and will be treated the same as other debts,
  • Change the way trustees levy their fees,
  • Ensure that creditors are notified of the level of fees that the trustee will charge before they are asked to agree to the trust deed,
  • Ensure that creditors are asked to approve any increase to the trustee’s fixed fee, and
  • Ensure that no contributions can be paid from a debtor’s social security benefits.

 

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