"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.