If you’re having trouble keeping up with debt unsecured debts of over £5000 then a Trust Deed is one of three main solutions that could help you. The other two options are a Debt Arrangement Scheme or a Sequestration but these can be expensive and disruptive and may not be for you. If this is the case then a Trust Deed is the option for you.
How Does a Trust Deed Work?
A Trust Deed is a legally binding contract between a lender and you which enables you to get rid of a large part of your unsecured debt ad repay only what you can afford to repay. You can take our Debt Test to see if you qualify and if you do then you will be put in contact with one of our expert debt advisor’s who will calculate what you are able to pay. The advisor will take into account such things like mortgage, living expenses, and cars when calculating what you can pay. If you and your advisor decide to get a Trust Deed, then your advisor will get you a qualified Insolvency Practitioner as it is legally required because only an Insolvency Practitioner can set up a Trust Deed.
Your Insolvency Practitioner will act as your trustee and will negotiate with your lenders until they agree to terms you can afford. One the terms are accepted then the Trust Deed will be “Protected” and your lenders will be unable to take further action against you as long as you keep up with the monthly payment. All interest charges are frozen and once you have completed all the payments then the debt will be written off.
There are pros and cons to a Trust Deed and below we shall look at those:
Advantages of a Trust Deed
-You can write off a large portion of your debt.
-All interest is frozen.
-You only have to pay a small monthly payment.
-You will be debt free by the time the Trust Deed ends.
-No more bothersome calls or letters from your lenders.
-You will keep your home.
-Not as disruptive as a Sequestration.
-Can be set up within 5-6 weeks.
Disadvantages of a Trust Deed
-Debts like your mortgage and hire purchase repayments aren’t included.-All your assets and liabilities must be declared.
-If you are a home-owner you may have to give any equity to help pay your debt.
-You must stick to your Trust Deed plans budget carefully.
-It will affect your credit rating and will be present on your credit history for six years.
-Some occupations need prior approval.
-You cannot get further credit whilst you have a Trust Deed.
-If you do not keep up with the payments of your Trust Deed then your assets may be seized and a Sequestration proceedings may start against you.
A Trust Deed may seem like the perfect way forward but you must get expert advice and an expert review of your situation before you proceed. You can use our Debt Test at http://www.scotlandstrustdeed.co.uk/ to see where you stand. If you do qualify then we can help you with expert professionals who will handle your case with care and confidence.