If you can answer yes to the following questions then a Trust Deed may be right for you.

1.       Are you unable to maintain the contractual payments to your debts when they fall due?

2.       Do you owe more than you own?

3.       Do you have insufficient funds to make a reduced payment which would clear your debts in a realistic timeframe? 

A Trust Deed is only available to individuals, resident in Scotland it is a legal agreement between you and your creditors and is administered by a Licensed Insolvency Practitioner (IP).  You can contact our Insolvency Practitioner at www.yourdebtexpert.com. Although a Trust Deed is less flexible than a Debt Payment Plan it allows you to get relief from some of your debt.

Here are a few advantages of a Trust Deed:

–          You only have to make one affordable monthly payment which is then distributed amongst your creditors

–          You will be debt free on successful completion of your trust deed

–          Your creditors are not allowed to contact you once your trust deed has become protected

–          Interest and charges on your accounts will be frozen

–          Recovery and legal action will stop

–          You may be able to keep your home or other assets, although you will usually have to release any equity you have them

–          It will stop you getting further into debt by removing the temptation of further borrowing

As with every debt solution, there are also disadvantages to a Trust Deed

–          Your credit rating will be adversely affected

–          You are not permitted to be a director of a limited company

–          Your home and job could be at risk through sequestration if you can’t make all your repayments

–          You are committed to a legally binding repayment plan normally for 3 years although this can be extended.

–          You may find getting credit in the future more expensive, as future creditors will assess your risk level based on your financial history.

–          You will not be able to use your store or credit cards. You will be required to cut them up.

–          You will normally not be allowed to borrow any more money until you have successfully completed your arrangement. It may however be possible with the permission of your Insolvency Practitioner to change an existing mortgage or take a new one while you are in a Protected Trust Deed.

–          If the Protected Trust Deed fails as a consequence of you not meeting your obligations under it, it likely that you will be sequestrated (bankrupt).

–          Your bank may close your bank account.

A Trust Deed is tailored to your individual needs depending on your circumstances. Having weighed up the advantages and disadvantages you may wish to discuss a Trust Deed further. If you do want more information, then contact yourdebtexpert.com trust deeds specialists.

For more information you can also follow Peter Dean on Twitter: @peterdean_debt