What is a Trust Deed?
Is it a loan?
Is there a limit to the number of credit cards I can include?
R. McCall, Glasgow.
No. The process is a voluntary action using government legislation to resolve debt without taking out any further credit.
Why would I want a Trust Deed?
S. Burton, Cambuslang
No. There is no physical limit to the number of creditors. Therefore you can include as many unsecured debts as you have and this
also goes for store cards and unsecured personal loans.
Are there any disadvantages?
B. Malcolm, Stirling
It offers a multitude of benefits, however the advantages that appeal to most people are:
- Repayment based on what individuals can AFFORD to repay.
- A finalised date of discharge, therefore peace of mind that in 36 months you would be debt free.
- No threat of legal action or further charges by creditors.
- One point of contact. You make your monthly repayments and your Trustee handles the rest.
- Creditors are legally bound to agree to the terms of the agreement.
How do I set up a Trust Deed?
A. Jenkins, Undisclosed
There are some disadvantages that you should be made aware of. Some employers request that their new employees gain pre-approval before entering into any
form of personal insolvency i.e. some financial companies and police. You are not allowed to take out any credit while repaying your arrangement and you will
find it extremely difficult and more expensive to get further credit for at least 3 years after the trust deed has ended.
Consider also that there may be other more appropriate Scottish debt solutions such as the Debt Arrangement Scheme which may be better for you depending
on your own situation.
Does repayment always last for 3 years?
T. Smith, Edinburgh
Give us a call or complete our online form. One of our money advice team will discuss your financial situation with you. We will look at your income, expenditure and debt level. If
you qualify for a Trust Deed and it appears that it is the best solution for you, subject to your agreement you will proceed to Stage 2.
You will have a face-to-face meeting with a representative of your elected company. They will go through the whole process with you and most
importantly address any concerns that you may have. Provided that you understand the process and feel comfortable going ahead with the agreement, you
will sign the documentation. You can also do this stage by telephone but we recommend a home visit, or at the office of the company if preferred. This is
completely free of any charge.
The Trustee will begin work on your proposal, notification will be sent to your creditors with and the formal process will be underway. This period can
be the most stressful as this period is by law required in order to allow your creditors the chance to object to the Trust Deed within the time allowed. You
will not be forwarded for this stage unless you have a good chance of getting acceptance. This is where the experience of the Trustee is vital. Your Trustee
as always is there for you and will provide support at all times.
Typically 5 weeks later, your Trust Deed will become protected by law, provided that there are no objections from creditors who together own more than
a third of your debt. As long as you keep up the payments, you will be discharged free of charge.
What happens once all my payments have been made?
Y. Allerton, Glasgow
The typical repayment period is 36 months but in some circumstances, it may be extended.
G. Turnbull, Edinburgh
When you have finished repaying you will then be formally discharged and any unsecured debt will be written off. You will be officially debt free.