Protected trust deeds: improving the process consultation

5 Verification of Information Contained in Trust Deed Protection Requests

5.1 Assets

5.1.1 As required in all prospective PTDs, steps must be taken to ensure that the value of all realisable assets is appropriately reflected in the statement of affairs and notified to creditors. This will require independent evidence of valuation to be obtained in the case of material assets and evidence of any outstanding loan secured against the asset(s).

5.2 Liabilities

5.2.1 The trustee must make best endeavours to obtain full details of all known and potential creditors from the debtor. The trustee must also make best endeavours to obtain up to-date statements and letters or copies of agreements from each creditor prior to the issue of the trust deed protection request should the debtor be unable to provide the information required. Creditors must make best endeavours to ensure that requests for information are dealt with within reasonable timescales.

5.3 Income and Expenditure

5.3.1 Income must be verified by means of 3 months of pay slips (or a suitable equivalent for the self-employed) or bank statements (in the case of weekly pay slips, it is sufficient to check a selection to cover the 3 month period). In the absence of pay slips ( e.g. if they have been lost), bank statements must be checked.

5.3.2 Creditors will normally accept income and expenditure statements drawn up by the trustee and verified in accordance with this Guidance, as the basis of a request for protection of the trust deed.

5.3.3 A common expenditure statement will be utilised for all trust deed protection requests. This will include appropriate detail of expenditure. Generally, there should be no deviation from the expenditure guidelines. However, where additional expenditure is necessary, for example due to special dietary requirements or increased heating bills due to caring for elderly relatives or above average work-related travel costs, this must be clearly explained.

5.3.4 If the debtor wishes to continue to pay for exceptional financial commitments, for example, health insurance or payment protection insurance, the protection request must contain a note stating why this is considered to be essential expenditure.

5.3.5 The expenditure elements that require formal verification and justification where appropriate are:

• Secured loan payments - verification by sight of relevant mortgage or bank statements.
• Rent - verification by sight of rent agreement or relevant bank statement entries.
• Council tax - verification by sight of council tax bill or relevant bank statement entries.
• Vehicle Finance - verification by means of relevant HP/Finance agreement and/or Motability documentation. Any vehicle which is reasonably required by the debtor, not exceeding £3,000 in value will be excluded from the trust deed in compliance with the amended Section 11 of the Debt Arrangement and Attachment (Scotland) Act 2002. The amendment is detailed in Regulation 4 of the Bankruptcy (Scotland) Amendment Regulations 2010.
• Pension - verification by sight of pension scheme documentation and/or wage slip/pension contribution statement.
• Other financial commitments such as endowment policies, life policies, health insurance and payment protection insurance - verification by reference to appropriate documentation.
• When the best endeavours to obtain the above information have not been successful and the trustee is satisfied that the circumstances are as described by the debtor, a statement from the trustee to this effect will be sufficient.

5.3.6 The trustee's report to creditors will include a statement that the income and expenditure have been verified in accordance with the Guidance and provide details of the means used where the debtor is self-employed.