Tuesday, 10 May 2011

Introduction to a Protected Trust Deed

http://ukdebthelper.blogspot.com/Introduction to a Trust Deed

Roughly 9,000 enter a Trust Deed in 2010. It's a popular solution for people living in Scotland and in debt. It has a number of benefits including only repaying a percentage of the money you borrowed, with the rest being potentially cleared. There are a number of different debt solutions for people in debt. We're exploring the positives and negatives of the Trust Deed.

Like all debt solutions there are positives and negatives. The Trust Deed is becoming a more popular debt solution, with hundreds of companies looking to offer this debt solution. However the Trust Deed solution comes with a warning and should be considered with great care.

What are the negatives?

With the rise of the Trust Deed debt solution we've seen an increasing number of complaints to the Office of Fair Trading because of unfair practices. This means that people who are not suitable for a Trust Deed are being told it's the right debt solution for them. The money made by companies because of people entering a Trust Deed can be astronomical. This article confirms the truth behind the negatives of the Trust Deed debt solution.

The negatives of a Trust Deed include;

- If you fail to meet your contributions then you would be likely to face Sequestration.
- Your equity within your house must be taken into consideration. Some companies fail to explain that if your equity has not been dealt with by the end of your debt solution then you may have to sell your house.
- Your credit file will have a default on it for 6 years.

When is a Trust Deed right

In many instances the Trust Deed is the right debt solution. When you have severe debt problems and you realistically cannot repay your debts with your available disposable income, then a debt solution is required. If you have equity within your property which could pay your debt in full then you would not be able to enter a protected trust deed.

Who do I speak to

If you have debt problems then you have a choice who you tell. Some people don't even want to tell their closest family. It's essential you get the help you need. We've created some top tips when deciding who to contact for debt help.

1. Never speak to companies who text, email, mail or telephone you. They are the companies most likely to be making the most profit by charging you for simple advice which a free charity could offer.

2. Never feel pressured by a company into signing anything. If they are pressurising you then they are more concerned by the money they can make and will not really care about your financial situation.

3. Check for a consumer credit licence. If the company doesn't have a consumer credit licence then they are breaking the law and not a legitimate debt advice company.

4. Google. Check Google for feedback from other people.
5. Never contact a debt management company. Some for profit companies will only offer one solution- a debt management plan. The debt management plan can be useful for some people, however it is an informal arrangement with your creditors any companies only need a consumer credit licence to administer this solution. If a company only offers a debt management plan and no other solution, then you can quickly find yourself in a long term (40 years) debt management plan.

The options for debt advice

There are a number of options for people in debt and looking for help. Most people recommend speaking to a debt charity because they are not profit focussed. Other people prefer immediate face to face debt advice. In this instance you may need to pay for advice out of your own pocket. Free debt advice can be found at a number of debt charities, with the citizens advice bureau offering face to face charity advice.


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