A Scottish Trust Deed is a formal agreement between an individual and their creditors. It is designed to help people who are struggling to pay their debt repayments and will define how much they can afford to pay back and when.
Trust Deeds are an alternative to sequestration and if they become ‘protected’ can be a forceful legal tool which will set the holder back on the road to financial stability.
Provided you keep up with the affordable payments agreed within the Trust Deed, after an average of four years you will be debt free.
Unaffordable debt will be written off. This means that if you owe more than you can afford to pay off within the four to five years of the trust deed term you will no longer liable for it.
There are no set up fees or credit checks.
How do I qualify for a Trust Deed?
- You must have a minimum of £5,000 of unsecured debt. Unsecured debt is money owed without an asset behind it that can be taken if the debt is not paid. Mortgages and car loans are the main examples of secured debt.
- It must be declared by a professional money advisor that you will be unable to pay what you owe within a reasonable amount of time. This is called being insolvent and proving to creditors that you are and this is where companies such as Scotland’s Trust Deed have an important role.
- You must live in Scotland or have lived in Scotland within the last year. Or you have must have a business in Scotland.
- Your creditors must agree to the Trust Deed proposal. This is never guaranteed but the expert staff at Scotland’s Trust Deed are experienced negotiators and will work hard to see your Trust Deed secured.
What can I do if I don’t qualify?
There are other options available for people who don’t meet the criteria for a Trust Deed.
- Money advice from other charitable organisations will help you identify where savings can be made within your budget, what benefits you may qualify for and advise on how to prioritise your debts.
- A Debt Advisory Scheme (DAS) is worth looking into, this is a Scottish Government-backed process that will assess your debts and situation. If you qualify, the DAS will appoint an administrator to handle your creditors and take affordable monthly payments from you until the debt has been paid.
- This is the Scottish term for bankruptcy and there are two types. ‘Minimal Assets Process’ (MAP) is for people with limited income and few assets, ‘Standard Administration’ for people who own property, land and cars.
Sequestration is usually a last resort as it is the most restrictive and impactful of the options available. Property and assets will be repossessed, access to banking is restricted, jobs and tenancy agreements can be at risk and all financial control is given to a trustee.
If you are struggling with debt don’t wait for late payment charges and interest to make the situation worse. Contact Scotland’s Trust Deed to find out if you qualify for the first step on the road back to financial stability.