There are a number of ways people residing in Scotland can live a debt free life and one option which is available for people with unsecured debts is a Scottish Trust Deed. For anyone finding it a struggle to repay their debt we firmly believe you should seek debt advice as soon as possible for a registered debt advice charity.
What is a Scottish Trust Deed?
The Trust Deed Scotland is a formal arrangement where people residing in Scotland can consolidate all their unsecured debt. When you are in a trust deed you make one monthly affordable payment over a fixed period of time, usually 36 months.
When entering in to a trust deed you must be able to make monthly payments towards your debt on a regular basis. This money will then be distributed towards your creditors on a pro rata basis. To determine how much you should pay towards your debt you should complete an income and expenditure with a debt advisor. Following this, we would be able to explain how much you would have to contribute back towards your debt.
Are there benefits of Trust Deeds?
When you have overwhelming debt problems a trust deed has a number of advantages. Once you are making one affordable monthly payment you no longer have to struggle with a variety of different creditors. Also due to the fact that it is over a set period of time you are aware of exactly when it is coming to an end and when you will be debt free. Also once the trust deed has started all interest and charges by the creditors will stop and they will not be able to take any further against you. At the end of the agreement any unpaid debt will be written off.
Are there negatives of Trust Deeds?
The Trust Deed will place a a default against your credit file which will last for 6 years. If you have equity within any assets then this may be required too. For a full review of the pros and cons of a Trust Deed please visit our debt solutions page.
How can I arrange to get a Trust Deed?
As soon as you find yourself struggling to repay your debt we recommend you call us for some impartial advice. We will complete an income and expenditure with you and take note of all your debt. If at this stage we believe that a Protected Trust Deed may be applicable for you we will explain the pros and cons to this solution, as well as other solutions you are applicable for.
A Scottish insolvency practitioner will put a proposal forward to your creditors. The creditors can accept or reject your proposal. On the basis that a majority in number (e.g. 5 out of the 6 creditors) or a third in value accept the proposal then your Trust Deed will be Protected.
How much debt do I need to be in?
Not everyone is suitable for a Trust Deed and there is certain criteria you must meet. If you don't meet the criteria don't worry, there will be other debt solutions available for you. Typically, a person entering a Trust Deed will owe at least £10,000 in unsecured debt to a minimum of 2 different creditors. You would have to repay a certain percentage of the money you borrowed.
If you would like any further information please do not hesitate to give us a call on 0800 085 0226 or complete our debt analyser.