Monday, 19 December 2011

Trust Deed Scotland or Sequestration?

Should i enter a trust deed or opt for sequestration?

For people who find themselves with acute financial difficulties and mounting debt problems often the solutions available can be daunting. Dependant on the severity of the problem this may result in sequestration (Scotland) or bankruptcy (rest of the UK), this solution is the most extreme and damaging to an individual who selects this route. In this solution your details with be published in a national paper and your information regarding the sequestration can be found with relative ease on the internet. Any assets you have will most probably be sold in order to realise money to pay towards your debts. This is often a most traumatic experience for a person going through this solution and should only be taken when no other option is suitable. This solution would also force through the sale of your property if you own one and if it had equity within the property, again an unpleasant and traumatic experience to be avoided. This solution also has the most damaging impact of all to your credit rating and will take many years to fully recover. This is because you have defaulted on your loans and been unable to make an acceptable monthly payment to your creditors over a period of time as would be the case within a protected trust deed. As with any debt solution qualified professional advice should always be taken before entering a solution and this is certainly the case with sequestration/bankruptcy. There are also limitations as to positions and jobs you can hold for instance you are not permitted to be a company director whilst you are bankrupt.

Scottish Trust Deed

A Scottish trust deed is another debt solution for people living in Scotland which may be a much better solution. A trust deed or “protected” trust deed lasts for three years and within this time you will contribute as much as you can afford towards your debts. Any outstanding monies due to creditors after the three year period will then be written off and you are free of debt and worry. In order to qualify for a trust deed you must have £10,000 worth of debt and be able to contribute approximately £150 per month. In order to proceed with a trust deed you will require the services of an insolvency practitioner who will complete an income and expenditure in order to identify what assets exist and how much a person can afford to contribute towards their debts.

Having completed this exercise the IP would arrange a meeting of your creditors and assuming they accept the proposal your trust deed would become “protected” after 5 weeks. Your IP would be responsible for your financial conduct over the period of your trust deed and takes the title of trustee. Your trustee would carry out regular income and expenditures to ensure you are contributing the appropriate amount to your debts. This means if your financial position changes you may pay more or less towards your agreement.

Your trustee is also responsible for the conduct of your creditors throughout the term of the trust deed. This means if any creditor continues to harass you during this period you should advise your trustee who will ensure this stops immediately as this is illegal.

Negatives of a Trust Deed

There are negatives behind this solution however as during the term of the protected trust deed you are not permitted to take out further credit .Your credit file will also be damaged for a total of 6 years approximately meaning being accepted for credit or a mortgage during this period would be extremely difficult.

However to regain control of your finances, be able to answer the telephone and finally get a good night’s sleep once again many people find the positives far outweigh the negatives.

Thursday, 15 December 2011

Debt Management Vs Trust Deed

There are many different reasons people consider opting for a Scottish trust deed. Many are keen to avoid sequestration or stop spiralling interest and charges or continued harassment from creditors. Another reason many people consider entering a trust deed is to write off their debt once and for all.

Why choose a trust deed to write off debt when you can do the same thing through sequestration? The simple answer is both routes will indeed do this, however sequestration has a more negative impact in the long term in relation to your credit history.

Dealing with creditors and debt collecting agencies can to put it mildly be an extremely unpleasant experience and most probably one you are unlikely to forget.
A trustee is required to act on your behalf in order to proceed with a Scottish trust deed, who will negotiate on your behalf with your creditors to secure an arrangement affordable to you in order to clear as much of your debt as you can afford over a period of approximately 3 years.

You may have considered exploring using a debt management as a good solution to clearing your debt however ,this solution can run for 10,12,or sometimes 15 years dependant on the amount of debt you have and how much you can afford to contribute each month. A trust deed will only last for 3 years on average with any outstanding monies due to creditors being written off at the end of that period.

There is also no guarantee within a debt management plan your creditors will stick to your proposal as there is no legal obligation to do so. Equally they are under no obligation to freeze interest and charges as they are in a protected trust deed.
Scottish Trust Deeds offer greater flexible to write off debt and there different ways you can hold some assets. If you have equity in your property you may have to release it dependant on how much you have, however after your trust deed has finished, you will write off any debt remaining on your accounts ,at that point you will then be debt free. Your creditors have no legal right to approach you and cannot come back to take anything from you in the future.

Whilst entering a Scottish trust deed should not be taken lightly, for many it is the correct solution and an excellent way to regain control over your financial position. And best of all after 3 years you are debt free and ready to move your life on free of the burden of worry.

"I'll have one Trust Deed please"

How do i go about entering a trust deed?

If your financial position has reached a point where managing your debt level and creditors yourself has became impossible you may have decided enough is enough. It is important to know there are solutions available to help you.

One solution many people explore is a trust deed, also known as a protected trust deed. The difference between the two is subtle but has an important difference. The key difference between the two is a trust deed does not legally enforce the arrangement on your creditors, put simply this means they can continue to press for payment, add charges and continue to call and write to you. This is far from ideal and serious consideration should be taken before agreeing to enter such a solution. A protected trust deed is different, within this arrangement there is a legally binding agreement between you and most importantly your creditors. This means once a trust deed has become “protected” all interest and charges must be frozen and in addition all contact from your creditors to you directly must cease ,whether that be via numerous telephone calls or a stream of demands coming through your letter box on a daily basis.

In order to enter a protected trust deed you must 1st seek independent advice from a reputable debt advice organisation, there are many not for profit organisations who will offer you excellent impartial advice free of charge. Should you decide to proceed with a trust deed you will require an insolvency practitioner to act on your behalf? Your IP will complete a full income and expenditure in order to fully understand your exact financial position .This will also tell the IP how much you can afford to pay towards your debts .Once this work has been carried out your IP will prepare a case explaining your financial position to your creditors. An offer will be made to them which will be the sum of money your IP has identified as being the amount you can reasonably contribute towards your debts on a monthly basis.

An advert will be lodged in the Edinburgh Gazette advising creditors you plan to enter a protected trust deed and if there are no objections within 5 weeks your case automatically adopts the status of “protected”.

Typically a protected trust deed will last for 3 years and during this period you will be expected to make one monthly payment to your IP,who now becomes known as your trustee, it is the responsibility of your trustee to distribute your payment proportionately and regularly to your creditors. Part of your trustees role is to ensure you pay as much as you can afford towards your debt and to that end your trustee will expect you to co operate fully and disclose any changes of circumstances that will affect the contribution you are making towards your debts .A failure to disclose relevant information can have serious legal implications. Your trustee is also liable however to ensure creditors cease all harassment and if contact has been made then you should advise your trustee immediately who will ensure this stops.

After you have complete your protected trust deed all outstanding debts are written off and you are free of any liability to move your life on free of worry and debt.

Wednesday, 14 December 2011

Trust deed: The pros and cons explained

Trust deed, the pros and cons explained

With no apparent end in sight to the continued downturn in employment coupled with pay freezes and rising bills it goes some way to explaining why more people than ever are exploring solutions to help them get out of debt. One of the solutions available to people who live in Scotland is called a trust deed.

A trust deed is only available to people that live in Scotland and was created by Scottish law in order to help people with serious debt problems .It is not as serious or damaging as sequestration which is the Scottish equivalent to bankruptcy as under a protected trust deed you can be a company director, hold a public office position or become self employed. This is not the case with sequestration or bankruptcy.
Trust deeds are excellent in certain circumstances for people who for a variety of reasons find they are over exposed to debt and struggling to honour the repayment terms to their creditors. This may be down to you or a family member having a pay cut or a loss of job, possibly even a period of illness.

All unsecured loans e.g. credit card ,store card, bank loans, overdraughts and many more can be included within a protected trust deed .Another excellent reason to consider this solution is that all interest and charges become frozen once your trust deed becomes protected meaning your debt stops increasing.

How a Trust Deed works

A trust deed works by bringing all your debts together and, after insolvency practitioner has completed an income and expenditure identify what is an affordable sum for you to pay on a monthly basis towards your debts.

It is the job of the insolvency practitioner to approach your creditors with the proposal on your behalf explaining your financial position and how much you can reasonably pay towards your debts. The IP is also known as your trustee and if the creditors accept the proposal the trustee will be responsible for ensuring you contribute as much as possible towards your debts. The trustee will monitor your income and expenditure throughout the period of the trust deed . The trust deed becomes “protected”5 weeks after the case is published in the Edinburgh Gazette as long as there are no objections or as long as they are less than one third in value or a majority in number.

Once the trust deed has become protected all communication/harassment from creditors has to stop which for most people is a blessing in itself. If any creditor continues to harass you then you should contact your trustee and he will ensure this practice stops immediately.

Negatives of a Trust Deed

The negatives are that you are not allowed to get further credit while you are in your protected trust deed and your credit file will have defaults attached for a period of 6 years .This will make attaining lines of credit difficult even after you complete the trust deed however once 6 years has passed this situation should ease . Your credit rating will be severely affected through the process.

Many people find the weight off their shoulders allows them to sleep better at night again and to be able to pick up the phone without fear far outweighs the negatives behind this solution in addition to the fact they know exactly when they will have completed the solution and start to re build their credit file once again.

Tuesday, 13 December 2011

What is a Scottish Protected Trust Deed

What is a Scottish Protected Trust Deed

A protected trust deed is a debt solution available to people living in Scotland which allows people to avoid the more serious solution of bankruptcy or as it is called in Scotland sequestration.

There are clear similarities between a trust deed and an individual Voluntary Arrangement (IVA). Within these solutions you pay as much as you can back to your creditors over a set period of time, at the end of this period any outstanding sums due to your creditors are written off. The typical term of each solution is 3 years for a protected trust deed and 5 years for an IVA.

In order for a trust deed to become protected either a third in value or a majority in number must agree to the terms of proposal .The actual proposal is put to your creditors on your behalf by an appointed insolvency practitioner , also called an IP or trustee. Your Trustee must place a notice in the Edinburgh Gazette in order that no creditor can come back at a future date objecting to the petition. All creditors must be informed of your intentions and sent a copy of the Edinburgh Gazette.

Your creditors thereafter have 5 weeks to object to your petition before it becomes protected as long as fewer than those with a third of the value of debt object or fewer than a third in number raise objections.

A protected trust deed is designed to help people avoid bankruptcy however it is a serious debt solution and should only be used as a means of avoiding bankruptcy. Your credit rating will be affected and obtaining credit will be extremely difficult for a period of 6 years in addition to this you are not permitted to take out credit through the duration of your protected trust deed.

There are however many benefits over the most acute of solutions (bankruptcy) namely you will be able to work in a self employed capacity or remain so if you currently are self employed. You will also be able to retain or become a company director through this solution as well as holding public office should you choose. And finally any outstanding amounts due to your creditors after you have completed the solution will be written off.

As with any debt solution you should always seek independent and impartial advice in order to allow you to make an informed decision that is best for you. There are several not for profit charities who can offer excellent advice on all debt solutions available who will not charge you for the advice you receive.

Scotland Trust Deed England IVA

Should you find yourself with serious debt problems the options can appear daunting as you try to find the best solution for your circumstances. In the most acute of financial positions this solution may be bankruptcy or sequestration as it is called in Scotland. This is the most severe of solutions and one that should not be entered into lightly as any assets you have accumulated over time may be sold and any monies accrued paid out to your creditors. Another solution may people opt for is a trust deed or protected trust deed. This solution is available to people living in Scotland. In England, Wales and Northern Ireland they have a different solution called an Individual Voluntary Arrangement scheme or IVA.

The principal of both schemes are the same, they are designed to give people who, for a variety of different reasons the opportunity to regain control of their finances and after a period of time approximately (3 years in a protected trust deed and 5 years in an IVA) put the financial trouble behind them.

As a trust deed is a legally binding agreement between you and your creditors you must seek appropriate advice from a qualified debt advisor who will discuss the pros and cons in relation to the solution. Should this option be best for you and should you wish to proceed you would be appointed an insolvency practitioner . The role of the (IP) is to manager your case in order for you to enter the trust deed and thereafter through the duration of your protected trust deed.

It is the responsibility of the IP to complete an income and expenditure with you. Having done this the IP will identify how much you can reasonably afford to contribute towards your debts whilst ensuring you have sufficient left to lead a basic life for the duration of the solution.

The IP will then create a report and arrange a meeting with your creditors in order to seek their approval to the proposal. Assuming your creditors agree to the terms of the arrangement them after a period of approximately 5 weeks your trust deed takes the status of “protected”.

Once your trust deed has been protected your creditors are bound by the terms of the trust deed, this means they can no longer contact you directly either by harassing phone calls or by letters. Equally you are bound by the terms of the agreement meaning you must make a monthly payment to your IP, they will then distribute money to your creditors on your behalf.

After you have ended the solution any outstanding money due to your creditors is written of and you are free to rebuild your credit rating however you should note that your credit file will reflect you entered a trust deed for a further 3 years before it is removed.

Truth about Trust Deed

It is important that you understand exactly what a Scottish Trust Deed is when trying to understand what can go wrong. Ignore adverts telling you how easy it is as they can be misguiding.

What is a Trust Deed?

A Trust deed is one form of insolvency, similar but not as severe as bankruptcy (sequestration). It is a big step to take and you should consider it carefully. It may not be ideal for you or it may be exactly right for your circumstances. It should always be treated seriously when you have no other route to repay your debt.
Some “trust deed advisors” have a financial interest in the trust deed going ahead so we always advise going with a charity. They will give the best advice to suit your own personnel needs and not tell you what you want to hear (they must tell you what you need to hear) do not be rushed into signing.

When talking to the debt advisor make sure he explains the “trust deed” correctly some claim they are experts when this is not always the case. Debt advisors at present do not have to hold a professional qualification. Again I express to keep with a charity as you do not want pushy sales people sending you down the wrong path.
The worst problem about getting poor advice is failure to inform the clients of the pit falls. The facts are if you have equity in your home or a car as well as your monthly payments you will need to pay over the value of these assets or they could be sold.

However if you are the owner of a car or a house this does not mean you should not sign a Scottish trust deed. It just means you should understand the full implications in advance; you need to know exactly what it will mean to you in advance. If you do not understand or will be unable to pay do not sign.

You also need to know what will happen if things get any worse or better. If you receive more income you will have to pay some or all of that into your Trust deed. If you win the lottery or inherit you will be required to pay this into your trust deed. If your income reduces or your outgoings go up there is a possibilities they will accept reduced payments, or extended the trust deed.

The best advice when entering a trust deed is to make sure you know all the pros and cons receive knowledgeable advice before signing. Take advice from a registered charity.

Protected Trust Deed Question

If i enter a protected trust deed what happens to my home?

Many people who find themselves in financial difficulties are attracted to a debt solution call a trust deed or protected trust deed .The two solutions are very similar however a trust deed takes on a “protected” status once your creditors have agreed to the solution. The proposal to your creditors is put forward by your insolvency practitioner (IP).

However a Trust Deed is not suitable for everyone. For instance if own your own property and equity has been identified relating to the house the IP has a duty to find a way to release the equity .The reason for this is due to the fact it is an asset and as such can be used to pay money back to your creditors. If however there is negative or very little equity your property will not be at risk and your trustee can allow future equity to be ring fenced. This means the value of the property is set at the point in time you enter the protected trust deed and not at the end. There is generally a fee applied by the IP in order to waiver any future interest in the property however, this route will give you peace of mind that your home will be safe throughout the duration of your solution.

Typically a protected trust deed will last for 3 yrs. You are restricted from taking out further credit during this period and your credit file will reflect the fact you have defaulted on loans/credit cards etc. It also takes approximately 6 years in total before all traces of you entering the solution have been removed from your credit file. During this period you will most likely find obtaining credit is harder usual, however after 6 years you should find this problem eases off.

After you have completed your protected trust deed any remaining sums of money due to your creditors will be written off .This is their part of the agreement and allows you to move forward free of debt from that date onwards.

For peace of mind and to make sleepless nights a thing of the past entering a protected trust deed is an excellent route out of financial difficulties for many people.

Debt Solution: Trust Deed

Debt Solution Scotland

There is a vast amount of people who have found themselves trapped by debt. For a variety of reasons people who have never lost control of their finances nor consider themselves reckless find themselves unable to meet their obligations on a monthly basis. Often this is due to short time work, withdrawal of overtime, redundancy, illness the list is endless.

Whatever the reason the impact on people’s social life, family and relationships tend to suffer as a result of financial pressures. It is often at this point at people start to look at what solutions are available to them in order to regain control of their lives.

Protected Trust Deed

One solution which may be appropriate is called a Trust Deed or a protected trust deed. This solution is available to people living in Scotland and whilst it is a legally binding arrangement and therefore a formal and serious solution is not as extreme as entering bankruptcy or sequestration as it is called in Scotland.

Should a Trust Deed be appropriate for your financial circumstances you have the benefit of knowing how long you will be in the solution for and more importantly when you will have completed the solution .The solution typically lasts for 3 years and thereafter you are debt free meaning you can start to rebuild your credit rating and after a further 3 years all history of you having entered a solution will have been removed from your credit file.

A Trust Deed is not suitable for everyone and you should seek advice before considering this as your best option.

How does it work?

All of your debts all totalled and after an insolvency practitioner has identified how much you can afford to pay to your debts on a monthly basis the IP will then take your payment and proportionately distribute the money to your creditors. This solution lasts for 3 years and any outstanding debt after this period is written off leaving you debt free.

What are the negatives?

Your credit rating will be affected by defaults marked on your file; this will last for approximately 6 years in total. You cannot take out further credit during the period of your protected trust deed .It is possible for people to discover you have entered a trust deed although this is unlikely and should you have assets you may well be asked to realise any values to pay towards your debts.

What are the positives?

You will know exactly when your arrangement will finish and you become debt free. Any outstanding money due to your creditors after you have ended the solution will be written off. You can finally answer the door/phone again and best of all you can sleep at night.

Monday, 12 December 2011

Effective Way To Get Debt Help

For people living in Scotland there is a debt solution available to them called a Trust Deed. This is the Scottish equivalent of an Individual Voluntary Arrangement (IVA) It is typically used where you have debts over £10,000.A Trust Deed is regulated by The Bankruptcy (Scotland) Act 1985.

A Trust Deed has the benefit of helping the person using this solution to pay off their debts at an affordable level over a period of typically 3yrs. A trustee is appointed to look after both the person in the trust deed and also the creditors.
An insolvency practitioner (IP) would carry out a complete income and expenditure to establish a true and accurate statement of affairs .This is done in order to calculate what can reasonably be paid towards the debts. The Trust Deed is thereafter presented by the IP to the creditors for their approval.

Two thirds of the creditors must agree to the Trust Deed for it to be accepted and become legally binding. A protected Trust Deed ensures that creditors must stop all interest and charges as well as telephone calls and letters etc and best of all they cannot enforce their debt further.

What is the Benefits of a Trust Deed

When the Trust Deed has been approved it means that all interest payments and charges become frozen relating to your unsecured debts and no other fees can be added by your creditors. This helps to ensure your debts are kept to a minimum for the duration of the Trust Deed.

The duration of a Trust Deed is usually completed in 3 years after which all outstanding debt would be written off. Many people during this period take time to reflect on why their finances became so unmanageable in order to ensure they avoid making the same errors again once they have completed the protected trust deed.
One major benefit with a Trust Deed is that (unlike bankruptcy) it is not made public therefore you can keep this information private and no one will know you have entered the solution, which on some lines of employment will ensure you keep your job. Some employers are less than sympathetic to your debt problems.

Another benefit to remember when entering a Trust Deed is that your Insolvency Practitioner deals with the whole process on your behalf. They will deal with all correspondence with creditors, thus removing a lot of stress associated with resolving your financial problems.

Once the Trust Deed has been approved and all arrangements are in place you will only make one single monthly payment towards your debt.

A Trust Deed can be an effective way to resolve serious debt problems, however you should always seek advice from a free debt counselling service to receive all information you require to make an informed decision .

Trust Deed Debt Option

Trust Deed Debt Option

Throughout Scotland the financial cost of living is taking its toll on many families. The ever increasing household bills and stagnant wages means that many families are falling into financial difficulty.

Help is available to help people repay their debts with Government legislation this comes in the form of Trust deed, Debt Arrangement Schemes and Sequestration. For many people they believe there problems are so bad that they are left with little choice but to move abroad, start afresh and walk away from their debt.

For many the pressure of being in debt can be too much to bare it affects everyone differently for some the only way out that they can see is to elope this is something they would not normally contemplate but they feel they have little choice. This will cross more people’s minds than you think.

Running Away Is Not The Answer

Running away or eloping is not a solution that any reputable debt advice company would recommend.

In days gone by it was known as a ‘Midnight flit’ and this name came from families leaving there homes in the dead of the night to avoid paying their creditor (landlords or anyone chasing them for money).

If you pay nothing to your debt for 6 years and your creditors cannot get hold of you within this time it will eventually become ‘Statue Barred’ and if the creditors manage after this to get hold of you they can make no attempt to contact you because after 6 years it is seen as harassment.

The down side is this will be marked on your credit file and should you return to the UK this will have an impact on you should you seek credit.
The other things to consider.

• Where would you live and work?
• Would you be able to communicate?

Also remember creditors will go to any length to find you. They will pull out every trick in the book. They may contact family members they will check all addresses they will check goggle can you live with this pressure?

They may also trace you abroad though they will be unable to pursue you for the debt it will be a constant reminder of what you have left behind.

If you live in Scotland the best thing you can do is contact Debt Support Trust they will help you resolve the Debt this advice is all free.

Running away from debt is not something anyone should do if it is a dream keep it as that.

Trust Deed Scotland Advice

Trust Deed Scotland

Trust deed is a solution for debt though it is available only to people residing in Scotland. It is a solution to people who can repay some but not all off their debt and it is not as damaging as bankruptcy which is still suitable for some who can no longer pay back debt without continuing to pay back more.

The words used to describe it are “Scottish trust deed” or a “protected trust deed”.
Before signing a person is promising to pay what they can reasonably afford towards their debt on a monthly basis. This amount will be agreed between both parties. Also people with assets (Commonly equity in property) will need to contribute the asset value in to the trust deed in lieu of the asset value.

They usually continue for three years, and by the end of the term all funds will have gathered in the trust deed. The funds that have gathered will first pay the fees of the trust deed and then each creditor will receive a dividend. If any creditors do not receive a dividend the debt must be written off legally and the creditors can no longer collect them.

For a lot of people in Scotland there disposable income is getting smaller quickly. The price of living has rised dramatically with the price increases in food, gas, electricity and fuel all on the increase. With many wages been frozen and job being lost the pressure to pay debt has never been so high but with money simply not there it is becoming harder and harder to pay the creditors.

With mortgage rates at an all time low this does help however this only leads us in to a false sense of security for when they do rise 8 million people will be affected. Putting even more pressure on the household budget.
If there is no money left to pay the creditors we are in danger of a "debt spiral". The only way to explain this is using creditors to pay creditors. If this did happen the level of debt will increase rapidly.

A trust deed can stop this "debt spiral". The payment into a trust deed depends on an individual’s personal finances and after doing an income and expenditure and taking of priority debt and living cost. Also making sure they have a realistic amount to live day to day without any further borrowing.

The golden rule is to seek help as soon as there is a problem always use a charity the sooner you seek help the more options will be available. For some a Trust deed will be the perfect solution it will not suit everyone so seek advice as soon as you foresee problems .

Thursday, 8 December 2011

Reduce Bills With Comparison Site

One of the best methods to resolving a debt problem is to make sure you are not overspending or missing out on savings. It has never been easier to compare the price of any product or service before making your purchase, with all the new comparison tools at our disposal.

Recently people found a way to make money from comparing the price of their shopping after Tesco offered to give people "double the difference" on any product which was cheaper elsewhere. Tesco were forced to pay out hundreds of pounds in some cases because people were able to compare store prices so easily.

It is even possible to compare prices on the go with different mobile phone apps which mean you don't need to compare prices online before you go to the shops.

UK Debt Helper has found a really good price comparison website which is easy to use and very friendly. Select  Money Tree will help you compare investment, insurance or even just a daily shop. You can also enter your details and find a range of ways which you can reduce your bill.