Do my creditors have to agree to a trust deed proposal?
Do my creditors have to agree to a trust deed proposal
?
"Scottish trust deeds" or "protected trust deeds" are both different terms for a trust deed. If a trust deed is to gain protection a sufficient amount of creditors should agree to the details of the trust deed. It will not happen in all circumstances but if the debtor agrees to repay a scheduled amount then many creditors will agree to smaller monthly payments as the person in debt is making a concrete commitment. Creditors may also make concessions on interest and charges.
When you sign a Scottish trust deed your insolvency practitioner will circulate the specifics of the advised agreement to all of your creditors. Your creditors will then have the chance to accept or say no to the details of the proposal. If enough creditors agree to the proposal all of your creditors (even those who rejected it) will be legally bound by the details.
To become protected, less than 50% of all your creditors must object to it becoming so. Secondly, any creditor (or combination of creditors) can halt protection if they represent more than one third of the value of your debts and argue against protection.
If a debtor is not able to pay their contracted repayments and the Scottish trust deed conditions are fair (this includes the trust deed providers charge), creditors will normally accept a trust deed becoming protected.
Creditors may disagree with trust deed protection if they suppose that the person in debt could pay back more by declaring bankruptcy. Another reason for disapproval could be that the cost of the insolvency practitioner is not fair.
Scottish trust deed operators can usually predict whether or not a trust deed will gather protection, as their facts comes from voting operatives that are employed by individual creditors to work on their behalf. Creditors typically opt to use one of two voting agents who work to ensure Scottish trust deed providers are aware of the criteria that they use to draw their conclusions.
By having excellent understanding and experience of the industry good Scottish trust deed operators find that at least 90% of their clients get trust deed protection.