A voluntary Scottish Trust Deed is a financial agreement that is made between a debtor and their creditors.
The voluntary Trust Deed stipulates that the debtor must repay part, or all of what they owe. The Trust Deed will transfer the debtor’s rights to the things that they own, to a trustee, who will sell these items to pay creditors. This type of trust deed will usually require a contribution from income for a set period of around 48 months.
Anyone overseeing a voluntary trust deed must be a qualified insolvency practitioner. Insolvency practitioners are regulated by law and should be members of an approved governing body. The voluntary trust is not a binding contract on the part of the creditors.
However, if they agree to the terms of the Trust Deed, the Trust Deed ceases being voluntary and becomes protected instead. Therefore voluntary or ‘Unprotected’ Trust Deeds are just the same as a Protected Trust Deed in its initial stages.