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.