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The Scottish Government developed Trust Deeds to assist people who are in debt, and Trust Deed Scotland® has helped over 25,000 Scottish residents become debt-free using Scottish Trust Deeds.
Trust Deeds are a voluntary but legally enforceable agreement between you and your creditors in which you agree to repay a reasonable percentage of your debt while keeping your home and vehicle.
When is a trust deed a viable solution for you?
If you have: debts – you have debts of £5,000 or more enough money to make monthly payments – you have enough money to make a regular contribution towards your debts, a trust deed may be an option for you. If your only source of income is from benefits, you can’t set up a trust deed unless you have belongings and property (assets) such as savings, investments, a car, or a house. These can be sold and the proceeds used to repay creditors.
When a trust deed is safeguarded
If your Scottish Trust Deeds isn’t protected, your loan will be subject to interest. It also exposes you to legal action from creditors who haven’t consented to the arrangement, thus this is a crucial component of how trust deeds work and their long-term viability. When the insolvency practitioner distributes the proposal, the insolvency practitioner hopes that a sufficient number of creditors would agree to the conditions of the trust deed, however there are times when the arrangement must be left unprotected:
If at least half of the creditors disagree to the proposal, it will be rejected.
If a third or more of your entire debt is held by creditors, you might consider filing for bankruptcy.
How Long Is The Term Of A Trust Deed Scheme?
- A Scottish Trust Deeds typically lasts 48 months, however it may be possible to finish sooner in certain circumstances, such as if you can repay creditors sooner or if you have a property to sell.
- If you are unable to satisfy your responsibilities within 48 months, or if you plan to make additional payments in lieu of the equity in your inherited property, a longer time may be allowed if reasonable and suitable.
Pros and corns of trust deed
The advantages of trust deeds
- You work with an insolvency practitioner (IP) to set up four-year repayment plans for your creditors. Any outstanding debt is then written off.
- Your creditors will not pursue you for payment or add further interest and charges to your debts once your trust deed is granted, and they will not be able to take any legal action against you.
The dangers of trust deeds
- An insolvency practitioner often deducts a fee for their services from your monthly trust deed payments, therefore it’s critical that you understand what proportion this will be.
- If you’re concerned about how a trust deed can influence your employment, examine your contract or chat with your HR department.
- There’s a chance you’ll become bankrupt.
How do I apply for a Trust Deed?
Simple fill out our form for a free call back or give us a call tol-03338803165 and speak to one of our experienced advisors.