A ‘Trust Deed’ is an agreement with the creditors to who you owe money to pay off what you can afford of your debt.
Fortunately, Scotland’s Trust Deed has a fantastic team who can support and guide you through every step of the process.
A Scottish trust deed is a less severe debt-solution route than sequestration (bankruptcy) and will avoid some of the legal restrictions and implications.
A Trust Deed will last, on average, for four years. After that time has ended, you will no longer be required to pay the rest of the debts involved in the Trust Deed and they will be written off.
You will be expected to pay an amount from your income to pay off some of your debts. The amount will be based on what you can reasonably afford after paying for your home, bills and necessities.
Some of your valuables (assets) may need to be given to the trustee of your Trust Deed. They will be sold to pay off a proportion of your debts.
Who is eligible for a Trust Deed?
- Your debts must be over £5,000
- You must have more than one debt.
- The applicant must be able to afford to pay back a minimum of 10p in every £1 they owe their creditors.
- You must live in Scotland
Why is a Trust Deed a good option for me?
- Interest and charges on your debt are not permitted once the creditor has agreed to your Trust Deed terms.
- If your Trust Deed becomes ‘protected’ even the creditors who did not agree to the terms must abide by them.
- Your creditors must communicate with your trustee, not you. The stress and worry of being hounded for money will be over.
- Unlike sequestration, you will be allowed a bank account with a debit card.
- Your employment will be unaffected except in very rare circumstances (check your contract of employment.)
- It is a flexible agreement that can be re-negotiated should your circumstances change.
- Your home may be protected from being sold to pay off your debts.
What are the negatives of a Trust Deed I should consider?
- Unless your Trust Deed becomes protected you will still have the creditors who did not agree to the terms to deal with and repay. Scotland’s Trust Deed can help you with this.
- Your financial freedom will be lost during the term of the Trust Deed. You must follow the advice of the trustee and do as they instruct, they can make you bankrupt if you don’t follow their rules.
- If you are the Director of a company this may have to end. Your Trustee and the rules of the company involved will decide.
- Your credit score and ability to get finance will be affected.
If you think that a trust deed is the right option for you, then you need to speak with the friendly team at Scotland’s Trust Deed as soon as possible. We look forward to helping you back on the road to financial stability.