Scottish IVA Register – Complete guide, FAQs & More
When you apply for a traditional IVA to take care of your debt in England, Wales or Northern Ireland and it’s accepted, your name gets entered into the Individual Insolvency Register.
Similarly, when you apply for a Scottish IVA to pay off your debt (known as a protected trust deed), you get entered into the Register of Insolvencies.
Today, I’ll be discussing the Scottish Insolvency Register and how long your name normally remains in there while your trust deed is in process.
What is the Register of Insolvencies?
Similar to the Individual Insolvency Register, the Register of Insolvencies is a publicly accessible database of insolvencies of both individuals as well as businesses which occur in Scotland.
This database can be accessed by anyone and is often used for background checks as well as to check one’s financial circumstances.
Typically, an entry within the register includes:
- Your Name
- Your Date of Birth
- Your Address
- Your Trustee’s (similar to an insolvency practitioner in a traditional IVA) details
- Your Protected Trust Deed’s starting date
- Your Protected Trust Deed’s ending date
If you fear that your address being public could lead to violence against you, then you can request the Accountant in Bankruptcy to not include your address within your entry.
It’s important to be aware of the fact that the Insolvency Register is designed to not appear as a result when it’s searched for using a search engine such as Google or Yahoo.
The important thing to note about your name being in the register of insolvencies is the fact that you’re going to have a lot of trouble obtaining credit. Not only that but you might also have trouble obtaining other services as well.
While it’s true that a protected trust deed doesn’t allow you to obtain much credit to begin with, the important thing to note is that while even if your protected trust deed ends in four years, your name will stay within the Register of Insolvencies for a total of six years since the date on which it was registered.
This means that for two further years after your debt is written off, you’ll still be having trouble obtaining credit.
And it’s not just obtaining credit.
For example, if you’re opting to rent a space, your potential landlord might check the register as well and if they find your name on it, they might be less willing to give out the space to you.
You can run into many sorts of other similar difficulties in your life when your name is in the Register of Insolvencies.
How do I Know if a Protected Trust Deed is Right for Me?
Trust deeds can be tricky to pin down just like most debt solutions.
I highly advise that you seek professional debt advice before you opt any one debt solution such as a protected trust deed.
For you to be considering a protected trust deed as an option in Scotland, you must at least:
- Have debt that totals up to £5,000 or more
- Have enough money to make regular monthly payments. You need to have a stable income in order to be eligible for a protected trust deed. You can’t pay for a trust deed using income that comes from benefits.
- Have valuable assets such as a car, a house, investments or savings which can be used to raise money in order to pay back your debt to your creditors.
- Have been a resident of Scotland for a minimum of six months.
What are Some Other Things to Think About When Applying for a Protected Trust Deed?
Many people don’t think about certain aspects when they’re opting for a protected trust deed.
Some of these aspects are:
The Amount of Income You Need
You’re going to need a sizeable amount of spare income every month in order to make significant enough contributions to your trust deed.
Your spare income is calculated by taking your monthly income and subtracting your essential living expenses from it. All money left over will be given towards your protected trust deed.
It’s also important to note that if you have enough disposable income to be able to pay off your debt in its entirety in less than 48 months, then you’ll not qualify to set up a trust deed. In this case, you’re going to have to look towards other debt solutions.
Trust deeds are intended for people that are unable to afford to pay back their debts in a time lower than 4 years.
Your Home and What Will Happen to It
If you own a home and enter into a Scottish trust deed, you may be required to sell it off in order to acquire money to pay towards your trust deed.
In some cases of trust deeds where there is little to no equity in your home, you might be able to get the terms of your trust deed amended so it doesn’t include your home.
Equity is defined as the amount of money you have left after you sell off your home and pay off the mortgage on it completely.
You are only allowed to exclude a single home from your protected trust deed and it’s necessary for that home to be the main property in which you reside.
If you have a trust deed and a family living with you in your home and your trustee wants to sell your home, you can apply to the sheriff court to ask for a delay of the sale. You can delay the sale for up to 3 years.
The Cost of Your Trust Deed
When you set up a trust deed in Scotland, you’re going to need to get an insolvency practitioner to be the trustee of your trust deed. The trustee has the same job for your trust deed that an IP has in an IVA.
They will typically charge a fee for setting up and managing your trust deed. It’s important to note that in Scotland, Trustees are not allowed to charge an hourly rate. Instead, they are required to charge a fixed, singular upfront fee along with a percentage of your assets which they sell of as part of paying back your debt.
A trust deed can be a costly debt solution which is why it’s a smart idea to get debt advice and browse different insolvency practitioners before settling for one.
Be sure to ask for thorough information on what the charges and fees of a certain trustee are going to be like.
There are a number of debt solutions in Scotland and the Scottish Register of Insolvencies keeps a track of all the individuals and businesses that opt for them.