Skip to content
Law Society of Scotland
Search
Find a Solicitor
Contact us
About us
Sign in
Search
Find a Solicitor
Contact us
About us
Sign in
  • For members

    • For members

    • CPD & Training

    • Membership and fees

    • Rules and guidance

    • Regulation and compliance

    • Journal

    • Business support

    • Career growth

    • Member benefits

    • Professional support

    • Lawscot Wellbeing

    • Lawscot Sustainability

  • News and events

    • News and events

    • Law Society news

    • Blogs & opinions

    • CPD & Training

    • Events

  • Qualifying and education

    • Qualifying and education

    • Qualifying as a Scottish solicitor

    • Career support and advice

    • Our work with schools

    • Lawscot Foundation

    • Funding your education

    • Social mobility

  • Research and policy

    • Research and policy

    • Research

    • Influencing the law and policy

    • Equality and diversity

    • Our international work

    • Legal Services Review

    • Meet the Policy team

  • For the public

    • For the public

    • What solicitors can do for you

    • Making a complaint

    • Client protection

    • Find a Solicitor

    • Frequently asked questions

    • Your Scottish solicitor

  • About us

    • About us

    • Contact us

    • Who we are

    • Our strategy, reports and plans

    • Help and advice

    • Our standards

    • Work with us

    • Our logo and branding

    • Equality and diversity

  1. Home
  2. News and events
  3. Legal news
  4. MSPs call for protected trust deed reforms

MSPs call for protected trust deed reforms

21st May 2020 | insolvency

Changes to the protected trust deed regime are needed to make it more effective in supporting people who are in debt, according to a committee of MSPs in a report published today.

Amongst its calls within the report, the Economy, Energy & Fair Work Committee is seeking changes to the way fees are charged in protected trust deeds. The current rules can see debtors making contributions but not reducing their overall debt levels for at least the first two years.

It also recommends that the minimum debt level to enter a protected trust deed is increased to ensure there is more surplus income to repay the debt to creditors. However, it is conscious that this may force more debtors into bankruptcy. The committee therefore reiterates the importance of looking at the interaction between all statutory debt solutions via a general debt review.

Last year around 8,000 people entered a protected trust deed, which involves a debtor’s assets being managed by an insolvency practitioner for the benefit of the creditors for a four-year period, during which part of the debtor’s income is paid to the insolvency practitioner. Debt advisers predict that debt problems across the country will become much more serious due to the COVID-19 recession.

The committee also heard evidence that online advertising and social media campaigns can target people in debt, offering a solution which is not always suitable for their circumstances.

Committee convener Michelle Ballantyne MSP commented: “A debt solution should work in reducing that person’s debt. We heard evidence which showed that fees were being frontloaded, resulting in the overall debt not lowering despite payments being made. This needs to change.

“The committee welcomes the Scottish Government's commitment to conduct an overarching debt review. However, it is incredibly important that the Scottish Government listen to the committee's recommendations to ensure that protected trust deeds act as an effective debt solution and debtors are safeguarded from the potential harm that can be caused when things go wrong.”

She added: “People in debt must receive the right help and advice and not choose a solution based purely on what they saw on social media that day. The committee recommends tighter regulations on online advertising and believes that free independent money advice would help ensure that people make the decision right for them.”

Click here to access the report.

Add To Favorites

Additional

  • News and events

In this section

  • Law Society news
  • CPD & Training
  • Blogs & opinions
  • Events
  • 75th Anniversary

Categories

  • civil litigation
  • criminal law
  • employment
  • obituary
  • careers
  • practice management
  • law society of scotland
  • government-administration
  • welfare/benefits
  • family-child law
  • reparation
  • professional regulation
  • property (non-commercial)
  • insolvency
  • consumer
  • human rights
  • mental health-adult incapacity
  • planning/environment
  • europe
  • information technology
  • immigration
  • education-training
  • executries
  • corporate
  • commercial property
  • agriculture-crofting
  • dispute resolution
  • risk management
  • intellectual property
  • client relations
  • tax
  • licensing
  • banking-financial services
  • trusts-asset management
  • reviews
  • opinion
  • For the public
  • Research and policy
  • Regulation
  • Journal online news
  • interview

News Archive

  • 2023
  • 2022
  • 2021
  • 2020
  • 2019
  • 2018
  • 2017
  • 2016
  • 2015
  • 2014
  • 2013

Related articles

  • Scheme for mental health debt moratorium opens to views
  • MSPs seek "lived experience" views on Bankruptcy Bill
  • Liquidation did not frustrate contract: Inner House
  • Views sought as debt solution reforms near conclusion
Law Society of Scotland
Atria One, 144 Morrison Street
Edinburgh
EH3 8EX
If you’re looking for a solicitor, visit FindaSolicitor.scot
T: +44(0) 131 226 7411
E: lawscot@lawscot.org.uk
About us
  • Contact us
  • Who we are
  • Strategy reports plans
  • Help and advice
  • Our standards
  • Work with us
Useful links
  • Find a Solicitor
  • Sign in
  • CPD & Training
  • Rules and guidance
  • Website terms and conditions
Law Society of Scotland | © 2025
Made by Gecko Agency Limited