What is a trust deed?
Trust Deeds are a formal debt solution whereby you can get rid of your debt by an agreement of creditors. You will pay a singular reduced monthly repayment based on what you can afford. Because the arrangement is fixed-term, whatever debt remains at the end of the agreed term is written off entirely.
Once your arrangement is set up and has received protected status we can protect you from creditor harassment. They are legally prohibited from sending you any more letters, they cannot phone you, and any form of legal action is out of the question. All communications must go through us, and we can inform you of anything important.
Trust Deeds exist to assist the tens of thousands of Scots throughout the country to get on top of their debts, while avoiding the more extreme measures like sequestration.
Do I qualify for a trust deed?
There are certain criteria you have to meet in order to qualify. Firstly, you must live in Scotland or have lived here within the last year. You must also have unsecured debts which amount to £5000 or more, and finally you must be insolvent (unable to pay the money you owe back).
Unsecured debts include things like:
- Credit Cards/Store Cards
- Payday Loans
- Council Tax/Rent Arrears
- HMRC Debts
- Unsecured Personal Bank Loan
Our team will need to determine if your income or assets will allow for a monthly repayment which satisfies your creditors. This isn’t extensive, you will usually only need to pay back ten pence on every pound you owe.
How is a Trust Deed set up?
Setting up the arrangement is simple, and the vast majority of the heavy-lifting will be taken care of by us. The stages generally go as follows:
Step 1: The first thing we’ll have to do is get an idea of the financial circumstances you are in. Once we have made ourselves familiar we can work out how much you will be able to contribute towards repaying your creditors. Whatever the amount, it will be as little as possible and won’t leave you in a desperate situation. We are on your side, not the creditors.
Remember picking up the phone and talking to us won’t cost you anything. Our advice is totally impartial and there are no costs attached. If you want to call it a day after consultation with us then don’t worry about any hidden commitments or costs!
Step 2: If you do choose to move forward with your debt solution, then we will be appointed as your official trustee. We will prepare a proposal which will describe how your assets will be handled (your home and car are very unlikely to be sold), and inform them of what monthly commitment you will be able to make.
The creditors including in your arrangement have five weeks to respond to the proposal. If they do not reply it is presumed that they have accepted. If we do receive objections but they do now make up more than one third of the total money owed, then the process can continue – your arrangement will not be protected and legally binding.
If the arrangement is rejected, then our team will be ready to give you advice on how is best to proceed and can offer alternative debt management plans.
Step 3: Since your trust deed is now protected creditors are limited in how they can contact you. All information must be sent through us, and we will decide what to relay to you. This means no more unsolicited phone calls and intimidating letters.
They can also no longer take any form of legal action against you. So long as you continue to make the repayments as per the agreement, this will continue.
Step 4: At the end of the fixed-term, typically four years, all remaining debt that you owe will be cleared – assuming you have made every agreed payment. Creditors must legally accept that the debt has been settled and cannot attempt to get any more money from you.
Now that everything is complete you can enjoy your new financial freedoms!
Advantages of a Trust Deed
- Take back ownership of your financial affairs by allowing us to convert your overwhelming creditor commitments into one reduced payment.
- Your debts can’t rise anymore during the arrangement. All interest rates and additional fees will be frozen.
- End the anxiety that comes with constant unwanted phone calls and demanding letters.
- Settle your debts while protecting your home and vehicle.
- All of the boring forms and complicated procedures are taken care of by us – we just need some information from you.
- Your money is safe from the threat of legal action by creditors.
- We will not charge you anything directly, the money to cover the service we provide will be included in your monthly repayments. In other words, from the money that would be going to creditors.
- If you meet every payment, after 48 months you will have wiped out a huge amount of the money you would otherwise have had to pay.
- Your credit rating will be refreshed after a fixed-term, which means you can start to rebuild it and have more control over the management of your finances.
Your Assets in a Trust Deed
If you want to protect your essential assets while tackling your debt, then a Trust Deed is a fantastic option due to the flexibility that it can offer.
Your Home – While some people might choose to sell their home, it would be very unusual if you were forced to do so to meet the terms of the agreement. Our team’s top priority is to make sure you stay in your home.
However, there are other methods of raising finance from your home without selling it. We might have to release some equity in order to raise enough money to satisfy your lenders. The equity on your home will have been determined at the beginning of the entire process and have been explained to you. There are many ways of doing this without you having to lose your home, but it is often the case that some equity will have to be converted into cash.
Your Car – If you need your vehicle at all for work or commitments to family then it is highly unlikely you will be forced to sell it. In cases where the car is of significant value, however, you may be forced to trade it in for a more modest vehicle to provide more money to satisfy your creditors.
If you pay for your car through a finance agreement like a hire purchase, then this will be accounted for within your monthly expenses. If you are leasing a particularly expensive car then you may be asked to downgrade. However, the most important thing, is that we can protect your vehicle.
To find out if you meet the criteria for a Trust Deed then get in contact with our great team of friendly and non-judgemental staff today! It’s time to join the countless people throughout the country who are taking a decisive action and wrestling control of their finances back from vicious creditors.
Call us on 0800 808 5124 for more information