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Executive summary
This document sets out the Executive's intentions for the reform of protected trust deeds for creditors ("protected trust deeds"), a form of personal bankruptcy in Scotland.
In formulating policy, the Executive has considered the views of a number of stakeholders, and two earlier consultations on protected trust deeds.
The intended reforms will balance the differing needs of debtors and creditors, taking account both of sequestration and the advent of a new statutory debt arrangement scheme.
Here is an overview of the reform proposals:
- The debtor should have the information needed to make an informed choice before signing a trust deed,
- A trust deed should be protected only where reasonable,
- A trust deed should not be protected unless the creditors are paid fairly (minimum payment threshold),
- The debtor should be discharged after no more than three years,
- It should be easier for creditors to make an objection,
- Student loan debt should not be cancelled,
- The trustee's fees and outlays should be quoted or estimated in advance,
- There should be a 'cooling off' period for debtors to cancel a trust deed that is not protected,
- There should be a duty on the trustee to keep good records of the business of the trust,
- There should be more information in the statement of the debtor's affairs,
- There should be better oversight of the fees and outlays in a protected trust,
- There should be better oversight of the amount to be paid to creditors,
- The Accountant in Bankruptcy should have power to direct the trustee,
- The Accountant in Bankruptcy should have discretion to charge the trustee rather than the trust for any audit and
- The discharge of the trustee by the creditors should not be delayed unduly.
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