Trust Deeds
If you live in Scotland and have unsecured debts which you are struggling to pay, a Trust Deed could be the ideal solution. Payplan offers free, impartial advice and will put you in touch with a licensed professional to arrange your Trust Deed plan.
What is a Trust Deed?
A Trust Deed is a legally binding agreement between an individual who is unable to pay his or her creditors and a licensed Insolvency Practitioner (the Trustee). The Trustee will put together a form of proposals to the Creditors for approval and administer the Trust Deed. It allows you to pay as much of your debts as your assets and/or your monthly surplus income will allow, usually over a three-year period.
A Trust Deed may be registered as protected, provided certain criteria are met. Once protected, all your creditors are bound by the agreement and must not contact you. While the terms of a Debt Management Plan are informal, and creditors may increase their demands on the debtor at any time, interest and charges will be frozen for the duration of a protected Trust Deed.
The process of a Trust Deed is not as formal as sequestration (bankruptcy). Although it is a legally binding agreement, there is no court involvement in setting up the process. Once signed, you are committed to the terms of your agreement (usually three years, but this can vary).
Could a Trust Deed be right for me?
The criteria for entering into a Trust Deed are straightforward, and we will be happy to talk them through with you.
- Only individuals in Scotland can enter into a Trust Deed. You could also qualify if Scotland has been your main country of residence at any time prior to the date the Trust Deed is signed.
- There is no set amount of debt or contribution required for a Trust Deed. Each Trust Deed proposal is treated individually, based on your own unique circumstances.
- Only unsecured debts can be included in a Trust Deed (these are debts not secured against property or other assets, e.g. mortgages).
If you have any questions about whether a Trust Deed may be suitable for you, please don't hesitate to call us.
What makes a Trust Deed preferable to other debt solutions?
For those with a large amount of unsecured debt, for whom a Debt Management Plan may not offer a solution within a fixed timescale or bankruptcy will be too disruptive, a Trust Deed offers financial freedom within the foreseeable future.
- All interest and charges will be frozen.
- Pressure from creditors will be eased, as the Trustee deals with all correspondence and queries.
- A Trust Deed is usually more flexible and less costly to administer than sequestration. It also allows the individual to hold certain public offices, which may not be the case with sequestration.
- It may be possible for companies to continue trading and individuals to retain their directorships.
- Trust Deeds are not published in local newspapers.
- After you successfully complete the term of your Trust Deed, you are free from all debt included in it.
What other points about Trust Deeds should I be aware of?
A Trust Deed will not be the ideal solution for every debtor and you should consider all implications before you enter into an agreement, including those listed below. Once again, please call us any time for free, impartial and confidential advice.
- All assets and liabilities have to be declared. You will be required to release any equity in your property and assets of large value will be realised.
- Entering a Trust Deed will affect your credit rating.
- You need to stick carefully to a budget for the duration of your Trust Deed and your income and expenditure will be reviewed regularly in this time.
Contact Payplan for further information about entering into Trust Deed
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