Large debts can feel like an inescapable grey cloud hovering over your head; it can seem impossible to shift your thoughts away from financial stress no matter how hard you try. All in all, being heavily in debt can significantly affect your life and personal happiness.
A trust deed is a legally binding agreement between an individual who is unable to meet payments to their creditors and a licensed Insolvency Practitioner (the Trustee). The process is not as formal as filing for bankruptcy but once signed, you are committed to the terms of your agreement.
When under the agreement, the trustee acts on your behalf and puts together a proposal to your creditors for approval. If accepted by all creditors, a trust deed is administered and you are then expected to maintain the new agreed payments.
If taken out with the right intentions, a trust deed can relieve some of the burden by consolidating all of your existing credit cards, loans and other debt problems into one often lower monthly repayment. With this method, individuals can pay off as much of their debt as their assets and/or monthly surplus income will allow, usually over a three-year period.
Providing that the terms of the agreement are met, all creditors are obliged not to make contact with you. They may increase their demands on the debtor at any time, but interest and charges will be frozen for the duration of the agreement. That said, the decision to take out a trust deed isn’t a light one and it should be considered carefully.
Trust Deeds are available only to residents in Scotland. There is no set amount of debt or level of contribution required to enter into this process, but only unsecured debts can be included – these are debts not secured against property or other assets such as mortgages. Each trust deed proposal is treated individually, tailored to the individual’s own unique circumstances and confidential advice can be given to anyone considering the process.
