With so many people in Scotland struggling with their debts, there are a number of financial solutions available and among them is a Scottish trust deed but is this the right solution for you?
Essentially, a trust deed could help someone in Scotland to take control of their finances if they have unsecured debts worth more than £5,000.
Growing numbers of us are worrying about our finances and pay our bills but it’s always worth exploring ways of getting onto a better financial footing.
Indeed, you should never stick your head in the sand and ignore your finances because doing so make issues even worse.
What is a trust deed?
So, what is a trust deed?
Essentially, a Scottish trust deed is a legally binding and voluntary agreement between someone who is struggling in debt and those they owe money to, also called creditors. The aim is to clear the debt they owe.
It’s only available to those who are living in Scotland and while it is type of insolvency, it will see those who undertake a trust deed pay a reduced amount towards repaying their debts over a certain period of time, usually up to four years.
One of the big attractions for a Scottish trust deed is that when this repayment period comes to an end, any outstanding debt is then written off – usually.
However, a trust deed must be administered and arranged only by a licensed insolvency practitioner.
Use a trust deed to be free of debt
To put things into focus, around 6,000 Scots will undertake a trust deed every year to be free of debt and the beginning of a New Year tends to see a surge in enquiries.
A trust deed is an effective way for people who are living in Scotland to get their financial situation into better shape. The team at Scotland’s Trust Deed are able to provide help and advice that is impartial and you don’t have to do abide by it.
It’s also important to appreciate that a trust deed is protected which means that the agreed repayment plan should be approved automatically though if there’s one creditor who accounts for 33% of the overall debt amount, they could object.
A protected trust deed will provide legal protection from creditors
Essentially, a protected trust deed will offer legal protection against creditors but you must abide by the deed’s terms and conditions.
It’s important to appreciate that should creditors not agree then the trust deed may not be protected and they could still pursue you for your debts.
There are rules to follow before you can qualify including having lived in Scotland for at least six months and with unsecured debts that are worth at least £5,000.
As part of the trust deed application process, there are other issues considered including the affordability of the repayment plan. It may be worth checking with the Scotland’s Trust Deed’s debt calculator to see whether you are eligible for a trust deed and, if not, what other options are open to you.
So, which of your debts can be included within a protected trust deed?
Undertaking a trust deed
If you’re interested in undertaking a trust deed then any unsecured debt such as bank loans, credit cards, payday loans, store cards and council tax debt as well as overdrafts can be included.
If you don’t meet the criteria for a protected Scottish trust deed then there are other potential debt solution vehicles that may interest you including sequestration, better known as bankruptcy, and also a debt arrangement scheme which is similar to a trust deed and is run by the Scottish government.
So, if you want to know whether a Scottish trust deed is for you, then it’s time to speak with the friendly debt advisers Scotland’s Trust Deed for more information.