Debt & Insolvency

At Ritson Young our dedicated specialist Insolvency team are able to deal with all your insolvency and debt requirements. We are able to offer a full personalised service whatever your requirements.

Recently there has been a significant change in the availability of credit and as a consequence an increase in those who find that they cannot keep up with the repayments.  In many cases this can be as a result of illness, job loss or relationship break up. In other cases it is because of being allowed to borrow too much and then borrowing from another source in an attempt to catch up with the consequence that it snowballs out of control.

The law recognises this and provides a number of solutions that allow relief from this situation.

Protected Trust Deeds

One of the solutions is to encourage people to pay what they can through a process known as a Protected Trust Deed. The Trust Deed element is that the person reaches an agreement with an Insolvency Practitioner to pay over a share of income for 4 years, which allows a payment to be made to the creditors. The payment is usually agreed at the outset, but is reviewed every six months. It is based on an assessment of both income and outgoings, excluding any current debt repayment costs.

It is possible that a Trust Deed could be financed in other ways for example the sale of assets or a contribution from a relative. The Protection is that if the creditors accept the agreement then you are given the protection of the law and a creditor cannot then pursue the debt but must deal with the trustee. A normal Trust Deed requires contributions for 4 years. At the end of that time the Trustee will close the case and any balance of the debt outstanding is written off.

It is important to distinguish this legal solution from a commercial Debt Management plan. Typically the company will collect income and make payments to your creditor to fend off collection action. Whilst that may work if the payments are large enough to reduce the debt but in many cases as it does not write off the balance of the debt or freeze interest it is common to find that the debt has increased not reduced.

A Trust Deed is a voluntary arrangement and you need to have some surplus income or assets to offer your creditors.

Click here to download your free guide to protected trust deeds