Do you live in Scotland struggling with debt? A trust deed could be for you.
Are you struggling to pay off your debts? Are you feeling overwhelmed and hopeless? You’re not alone. Millions of people are in the same boat. But there is hope. You can get out of debt, but it’s going to take some work. Read on for information on how to get started.
What Is a Trust Deed?
Similar to an IVA, a Trust Deed is a debt solution for Scottish residents that will have you make affordable monthly repayments over a four year period to write off some of your outstanding debt.
A Trust Deed is set up by an Insolvency Practitioner (IP), it will dilute your monthly payments so that you can pay the back in a more bitesize manner over the course of 4 years. After this period, any remaining unsecured debt can be written off. A Trust Deed is similar to an IVA but they are not identical.
Within a Trust Deed you consent to pay back a portion of your owing to protect your assets for example your car and your home.
A trust deed is a legally binding agreement between you and your creditors (the people you owe money to). It is a valid debt solution that people within Scotland can consider.
Pros and Cons of a Trust Deed?
Pros
- Bite-size repayments - You will be provided an allowance for key expenditure.
- Fixed repayment period - With a Trust Deed you know where you stand and the contract is legally binding. The repayment length is 4 years.
- You can keep one essential vehicle worth less than £3,000.
- You do not have to appear in courts as part of the application process for a Trust Deed.
Cons
- Fees to be paid to the IP - as part of the monthly payments however this is included within your monthly payments and will not be hidden to you.
- A Trust Deed may affect your right to work within some professions.
- If you do not stick to the terms of your Trust Deed it can potentially lead to bankruptcy.
- Trust Deeds will negatively affect your credit report and score.
How long does a Trust Deed stay present on your credit file?
It is possible for a Trust Deed to stay present for up to 6 years. However the majority of Trust Deeds are completed and written off within a 4 year period. The length will vary from person to persian depending on the amount you owe and the number of creditors owed.
Can you amend a Trust Deed?
A Trust Deed is semi flexible when it comes to amendments.
If for example your financial situation improves and you can pay off a larger chunk of the Trust Deed on a monthly basis then you might be expected to contribute a larger sum of money each month to pay off your debts earlier.
However, if you feel your situation has worsened over the course of the Trust Deed, it might be possible to reduce your monthly payments further to accommodate for this change.
In some cases it is also possible to pause the monthly payments entirely until your financial situation improves. However, they may have an effect on your credit score.
In both cases we would recommend getting sufficient debt advice from a professional trustee before taking action.
What is the criteria to get into a Trust Deed?
The main criteria for a Trust Deed is as follows:
- You must live in Scotland or have resided there within the last 12 months.
- You work within Scotland.
- Your debt value has to be above £5,000 or more.
- You must be able to make a monthly contribution into a Trust Deed and so must be able to prove some form of income, full time, part time or self employed.
- You are in a situation where you are unable to pay off your debts and your financial situation is spiraling.
- The money you owe to your creditors outweighs the value of the assets you own.
If you are within this criteria, it could be worth looking at a Trust Deed as a solution to your debts.
Is a Trust Deed worth it?
A Trust Deed could be a great solution to help you reach financial stability. It can help the right individuals pay off their outstanding debts alongside working with the creditors you owe money to.
However, if you do not have a reliable monthly income and or do not meet the criteria for a Trust Deed, there may be other solutions for you that are just as effective.
You can find the best solution for you by using our free debt solution finder.
How does a Trust Deed work?
Qualification
Complete our free solution finder, we’ll understand your circumstance and then create the best solution for you. If we believe you fit the criteria for an IVA you will be alerted by one of our specialists. Or you can call us directly.
Quick Chat With Our Specialist
Our friendly specialists will have a 5 minute discussion of your situation and run you through your options. This process is 100% free and confidential.
Your Choice
If we believe an IVA is the best solution for you, our specialists can help motion an IVA whenever you’re ready. This will put you on the path to becoming debt free!
not sure on the best solution for you?
Don’t worry, Try our free solution finder
Find Your Solution
(These are some hypothetical examples of clients using an IVA)
Chris Alozie
£13430 in Debt
- Council Tax
- Credit Cards
- Mortgage Arrears
Previous monthly payment: £752pm
New Payment
£
135
Per month
Rebecca Alvey
£5210 in Debt
- Credit Cards
- Payday Loans
- Mortgage Arrears
Previous monthly payment: £540pm
New Payment
£
101
Per month
Louise Stack
£20200 in Debt
- Credit Cards
- Mortgage Arrears
- Payday Loans
Previous monthly payment: £1093pm
New Payment
£
125
Per month
What to do If your IVA application is rejected?
(list of creditors)
IVA
A solution for people with over £6000 worth of debt, you must also owe more than one creditor. An IVA is a legally binding agreement which can help write off up to 81% of debts over a 50 – 60 months period.
Debt Management Plan
A Debt Management Plan or DMP, is an informal agreement between you and your creditors to pay back lower priority debts, this will reduce your monthly outgoings to an affordable figure each month.
Bankruptcy
Bankruptcy is a formal solution designed for those who physically cannot repay debts. Bankruptcy is often viewed as the last resort but can be a good solution for those who cannot make any repayments.
Don't know where to start?
No need to worry – we’re here to help you figure it all out.
Explore The Latest Articles
- Unlocking Financial Freedom: A Deep Dive into the Bankruptcy Proceedings
- Navigating Bankruptcy Pros and Cons (UK)
- Bankruptcy Debt Relief: Your Guide to Rebuilding Financial Freedom
- Debt Insights: Exploring Scotland’s Trust Deed Process
- Mastering Debt: A Closer Look at a Protected Trust Deed
- The Trust Deed Handbook: Unlocking the Secrets of Financial Security
Explore Popular Debt Articles
- How To Find the Best Online DMP For Your Situation
- Best Free Debt Help UK: Effective Debt Solutions
- Debt Relief Orders and Bankruptcy Debt Relief: What you need to know
- How UK Debt Management Companies Can Help You Get Out of Debt
- Debt Help UK: How to Get Out of Debt and Reclaim Your Financial Freedom
- 12 Habits for Effective Personal Debt Management Plan
The Money Advice Service is a free and impartial organisation, created by the Government, with the goal of
providing debt counselling, debt adjusting and credit information services to those in need. Individuals can
get professional free advice on how to manage their financial burdens by visiting www.moneyadviceservice.org.uk
