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If you’re struggling to see a way out of serious debt, having to juggle demands for repayment, and wondering how life is ever going to return to normal, then a trust deed could be one such solution to getting back in control. Here, we explain just about everything you’ll need to know.
Trust deeds are only available in Scotland and, as such, we can’t help you set up this option. Still, if you live in England, Wales, or Northern Ireland, we could assist you with an IVA.
We’ve explained just about everything you may need to know about Trust deeds here. If you’re based in Scotland, we hope this information helps you on the path to financial freedom.
A trust deed can be a great solution for dealing with unmanageable debts. A formal agreement between you and your creditors, it helps you control your finances through regular repayments over a fixed period.
When the trust deed is completed, any remaining debts are written off. One difference between this though when compared with an IVA is that your assets might be at risk with this debt solution.
With IVAs, on the other hand, your assets are protected.
Although the qualifying criteria for a trust deed varies between insolvency practitioners, you should qualify providing:
Trust deeds are managed by specialist individuals known as insolvency practitioners and you’ll have to find one of these individuals to make the trust deed official. During the application process, these professionals work with you to organise such aspects as a repayment plan and determine the length of the trust deed itself.
Usually, this person will then become a ‘trustee’. The trustee can act on your behalf regarding your financial affairs. He or she will, in turn, notify your creditors and attempt to gain their approval for the trust deed to become ‘protected’.
Where possible, a trustee will strive to grant a trust deed ‘protected’ status. In this situation, the agreement is binding on all parties and creditors cannot take steps – such as sending bailiffs or looking to make you bankrupt – to recover funds.
When the trustee seeks approval from creditors, at least 50% must agree to the terms for the trust deed to become protected. Should this not occur, the agreement instead becomes unprotected. As a result, the trust deed has no legal standing.
However, this situation is quite unlikely to occur. Providing the terms of the trust deed are reasonable and offer clear benefits to your creditors, it will usually gain protected status.
Similar to other financial solutions, a trust deed has a variety of pros and cons. For example, a protected trust deed has the following benefits:
However, protected trust deeds also have the following negatives:
If you live in Scotland, and want to regain control of your finances, a trust deed could be the best solution for you. If you want to discuss this option more, or to find out more information about a similar solution called an IVA, get in touch with our team through the button below:
Debt write off applies to unsecured debts and on completion of an IVA. A debt write off amount of between 20% and 80% is realistic, however the debt write off amount for each customer differs depending upon their individual financial circumstances and is subject to the approval of their creditors.
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Free money help and advice can be found at the MoneyAdviceService.org.uk