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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.
Trust deeds are only available in Scotland. However, if you live in England, Wales, or Northern Ireland, an IVA (individual voluntary arrangement) is similar. It’s worth noting that – although they share a lot of qualities – a trust deed does differ from an IVA.
Trust deeds are managed by specialist individuals known as insolvency practitioners. 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 has approval to 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.
Although the qualifying criteria for a trust deed varies between insolvency practitioners, you should qualify providing:
Similar to other financial solutions, a trust deed has a variety of pros and cons. For example, it has the following benefits:
If you live in Scotland, and want to regain control of your finances, a trust deed could be the best solution for you. To find out more information about this solution, get in touch with our team of friendly advisors today. You can do so through either the contact form or by calling 0161 956 2688.
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