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.
Showing posts with label Trust Deed Scotland. Show all posts
Showing posts with label Trust Deed Scotland. Show all posts
Tuesday, 13 December 2011
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.
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
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 .
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 .
Tuesday, 13 September 2011
"Can I enter a Trust Deed"?
The Protected Trust Deed is only available to people living in Scotland with serious debts.
What is a Trust Deed?
A Trust Deed is a legally binding arrangement between someone in debt and their creditors. A licenced insolvency practitioner is required to administer the solution. The Trust Deed is legally binding which means, if accepted, both you and your creditors would have to adhere to the terms of the Trust Deed for the full period (usually 36 months). The Protected Trust Deed is an insolvency solution for people who cannot afford to pay their contractual obligations to their debt as they fall due.
The process to enter a Protected Trust Deed is as follows
You cannot enter a joint Protected Trust Deed as the debt solution is individual. This means a husband and wife would need to enter individual Protected Trust Deed's. The insolvency company may decide to enter one Edinburgh Gazette advert as this would save money on the case.
General criteria to enter a Trust Deed?
There are positives and negatives to entering a Protected Trust Deed and you should always seek professional advice prior to entering any debt solution.
The negatives of the Trust Deed should be considered extremely cautiously before proceeding. These include;
Steven (29) and Dawn (31) from Dundee have two children and entered into a Protected Trust Deed. They didn't have a car and they lived in a housing association. Their debt was £15,000 each and they planned to pay £170 each.
Evan (43) from Glasgow entered a Protected Trust Deed with £42,000 debt and a disposable income of £350. Evan also had equity in his property of £7,000 which he had to release via remortgage. In 3 years Evan will be debt free and discharged from his Protected Trust Deed.
Keywords to find this page
What is a Trust Deed?
A Trust Deed is a legally binding arrangement between someone in debt and their creditors. A licenced insolvency practitioner is required to administer the solution. The Trust Deed is legally binding which means, if accepted, both you and your creditors would have to adhere to the terms of the Trust Deed for the full period (usually 36 months). The Protected Trust Deed is an insolvency solution for people who cannot afford to pay their contractual obligations to their debt as they fall due.
The process to enter a Protected Trust Deed is as follows
- Contact a debt advice charity to ensure a Protected Trust Deed is the right advice.
- If it is you would need a licenced Insolvency Practitoner to adminster your case (there are a number of insolvency practitioners in Scotland)
- The insolvency practitioner would create a proposal and send it out to all of your creditors. The proposal would include how much you propose to repay and over what period of time
- A notice is placed in the Edinburgh Gazette about your Trust Deed
- After 5 weeks, if less than a 1/3 in value or a majority in number DON'T object to the Trust Deed it will have gained Protection.
- The insolvency company will then register your Protected Trust Deed with the Accountant In Bankruptcy.
You cannot enter a joint Protected Trust Deed as the debt solution is individual. This means a husband and wife would need to enter individual Protected Trust Deed's. The insolvency company may decide to enter one Edinburgh Gazette advert as this would save money on the case.
General criteria to enter a Trust Deed?
- Must owe at least £10,000 of unsecured debt
- Must be able to repay at least 10% of the unsecured debt over 3 years (excluding the insolvency practitioner fees - ranging from £2,000 to £6,000).
- If your equity from an asset (house, car etc) plus 36 monthly payments is more than your total debt then a Protected Trust Deed would not be the best debt solution.
- You must have at least 2 different creditors.
There are positives and negatives to entering a Protected Trust Deed and you should always seek professional advice prior to entering any debt solution.
- Benefit 1: You can make affordable repayments towards your debts instead of trying to rob Peter to pay Paul.
- Benefit 2: You will write off some of your debt (typically 50%).
- Benefit 3: You can be sure of when the Protected Trust Deed will end (usually 3 years but your insolvency practitioner would inform you of this).
- Benefit 4: A Protected Trust Deed is a formal agreement for both you and your creditors which must be adhered to.
- Benefit 5: The Insolvency company will manage all creditor correspondence on your behalf.
- Benefit 6: Once your Protected Trust Deed has been agreed with your creditors they cannot change their mind at a later date, giving your security and protection.
The negatives of the Trust Deed should be considered extremely cautiously before proceeding. These include;
- Negative 1: It's legally binding so you will have to continue to make payments to your Protected Trust Deed, even if you don't want to continue.
- Negative 2: If you decide to stop paying your Trust Deed your Insolvency Practitioner would have a legal obligation to proceed with Bankruptcy.
- Negative 3: You can only include unsecured debts in your Protected Trust Deed - any others, such as your mortgage cannot be concluded. If you fail to maintain payments to secured debts then the items can be repossessed.
- Negative 4: A default will be added to your credit file and will last for 6 years.
- Negative 5: Your house / flat is typically secure, however any equity would need to be released to enter into the Trust Deed.
- Negative 6: You cannot obtain further credit whilst in your Protected Trust Deed.
Steven (29) and Dawn (31) from Dundee have two children and entered into a Protected Trust Deed. They didn't have a car and they lived in a housing association. Their debt was £15,000 each and they planned to pay £170 each.
Evan (43) from Glasgow entered a Protected Trust Deed with £42,000 debt and a disposable income of £350. Evan also had equity in his property of £7,000 which he had to release via remortgage. In 3 years Evan will be debt free and discharged from his Protected Trust Deed.
Keywords to find this page
- inurl:"Trust Deed" "Blog"
- inurl: "Trust Deed" keyword Trust Deed
- Protected Trust Deed blog
- inurl: "Trust Deed Dofollow"
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