Being in debt can be a stressful time but there are options for Scots to deal with their debts and… Read more »
Why a Trust Deed?
Ease the strain of debt
In today’s financial climate more and more responsible people in Scotland are finding it harder to keep up with their debts. If you’re one of them, a Trust Deed may help ease the strain. Many thousands of Scots who were in your position can testify to that. A Trust Deed Scotland is form of insolvency. It is a legally-binding contract between you and your lenders which allows you to use your income and assets to repay only what you can afford, usually over a 4-year period, and then write off any remaining debt that is left.
If you don’t qualify?
There are other options
Not everyone will qualify for a Trust Deed Scotland. This site outlines the criteria that need to be met. You can also take our simple Debt Test to get an instant answer. If you don’t qualify, please don’t despair. That does not necessarily mean you need to continue to struggle making your repayments. There are other alternatives you could be eligible for including a Debt Arrangement Scheme or Sequestration and you can find out more about these options on this site.
How we can help ?
Free expert advice and support
Our site is designed to provide you with straightforward information about how you could potentially ease your debt problems. You can then use our simple Debt Test to establish if you’re likely to qualify for a solution. Should you be likely to qualify, your case will be handled by one of our expert debt advisers. Your adviser will conduct a full financial review to identify the best solution for your own individual circumstances. All of this is free and there is no obligation for you to action any recommendation made.
What Is A Trust Deed?
If you have unsecured debts of £5k or more, a trust deed is one of the three main potential solutions that could help you. If a Debt Arrangement Scheme (DAS) isn’t an affordable option for you within a reasonable timescale, or if Sequestration would be too disruptive, then a Trust Deed could be the best route to financial freedom.
How Trust Deeds Work
A Scottish Trust Deed is a legally-binding contract between you and your lenders which allows you to write off a significant portion of your unsecured debts and repay only what you can afford.
If our Debt Test indicates you are likely to qualify for a trust deed, you will be assigned to one of our expert Debt Advisers who’ll review your circumstances in more detail. Your Adviser will work out what you can afford to repay each month, bearing in mind your mortgage, car and living expenses, and will identify if a Trust Deed is indeed the best option for you. If it is, and you choose to proceed, you will be contacted by our insolvency practitioner, since it’s a legal requirement that only an Insolvency Practitioner can set up and administer a Trust Deed. Your Insolvency Practitioner acts as your Trustee and will present to your lenders whatever amount you can afford to repay. Your Trustee will negotiate with your lenders to accept those terms. As long as the majority accept, your Trust Deed will become ‘protected’. And once ‘protected’ your lenders won’t be able to take any further action against you as long as you keep up with your monthly payments. Interest and charges will be frozen and once all payments are completed your remaining debts will simply be written off.
Trust Deed Advantages
- Write off a significant portion of your unsecured debt (these are things like personal loans, bank overdrafts, payday loans, credit cards)
- All interest and charges will be frozen
- One vastly reduced monthly payment
- Be completely debt-free by the end of the Trust Deed, typically in 48 months
- No more calls or letters or legal action from your lenders
- Keep your home although conditions may apply
- Not as potentially disruptive as Sequestration (bankruptcy)
- Quick to set up, typically 5 to 6 weeks
Trust Deed Disadvantages
- Secured debts like mortgage and hire purchase repayments can’t be included.
- All assets and liabilities have to be declared.
- If you’re a homeowner, you may be required to release any equity in it to help repay your lenders (or if you can’t release equity you may be required to make repayments for longer)
- You need to stick carefully to a budget for the duration of your Trust Deed and your income and expenditure will be reviewed regularly during the Trust Deed
- Your credit rating will be affected and will remain on your credit history for six years
- Certain occupations require prior approval
- You will not be allowed further credit while on a Trust Deed.
- If you fail to keep up the repayments of your Trust Deed then your assets may be at risk and sequestration proceedings could start against you.
Is it for you?
If you’re resident in Scotland and have unsecured debts of more than £5k then the advantages of a Trust Deed may be very attractive. However it’s important you receive expert advice and a detailed review of your options before applying for one. Take our simple Debt Test to establish if you’re likely to qualify for a trust deed in Scotland and connect with one of our professional Debt Advisers committed to identifying the right solution to helping you out of debt. Your enquiry will be handled professionally and in confidence.
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