SCOTTISH PROTECTED TRUST DEED/TRUST DEED
A ‘Trust Deed’ (informally known as) can become a ‘Scottish Protected ‘Trust Deed’, is an arrangement that allows you to write off up to 90% of your unsecured debts. This arrangement will be put in place for a period of time agreeable to you and within your current circumstances; this is dependent on the level of debts, your Income and Expenditure, and is worked out so it is affordable to you. At the end of the period agreed upon creditors will receive the funds accumulated.
If other options are available to get you back on track then these will be looked at with your best interests in mind. How a ‘Trust Deed’ can work for you will depend on your individual circumstances. These will be discussed at length on your initial contact with ‘DebtManUK’
PROPERTY AND/OR ASSETS
If you own property or any other assets that can be realised then this is what you may be asked to do through your ‘Trustee’. Your property is not at risk if you adhere to the terms the ‘Trustee’ will be required to set out for you. If there is equity in the property that, along with secured loans will be taken into account. You may then be requested to remortgage to release this equity, if a remortgage is not a viable option then payment in lieu of any equity left in the property will be required, this is usually done through a third party. It can also be made at the end of the term of the ‘Trust Deed’. Cars will also be taken into account in the same way. This can be explained in detail by our advisors. Mortgage, secured loans/charges and Hire Purchase commitments must continue to be paid.
PROTECTION
Following the granting of a ‘Trust Deed’, your ‘Trustee’ will place the notice in the Government Publication (Edinburgh Gazette). This is not available to the public; it is usually larger institutions and Solicitors that subscribe to it. Once this has been placed in the Gazette your creditors will be written to with a proposal for repayment. A full Statement of Affairs along with an Income & Expenditure will be sent to detail this proposal. Creditors will have 5 weeks from the date of the advertisement to object to the terms of the ‘Trust Deed’. Provided that no more than one third in value or a majority in number of your creditors object to the terms proposed, the ‘Trust Deed’ will become protected binding all creditors to its terms. Creditors can no longer take court action for recovery of any debt incurred prior to the ‘Trust Deed’ being signed.
COSTS
What you can expect to pay will be based on Assets the ‘Trustee’ is able to realise and disposable Income after realistic living expenses are taken into account. If you have no assets then contributions will be ‘disposable Income’ only based. You will not be required to bear the direct costs of the ‘Trustee’ administering the ‘Trust Deed’; these will be met from the contributions and assets realised which will be in the proposal to the creditors.
ADVANTAGES OF A TRUST DEED
- Pressure from creditors is removed
- You never need deal with these creditors again
- You agree the proposals to creditors and are therefore still in control of your finances
- Less costly than Sequestration and usually results in a better outcome for your creditors
- Compare this to a debt management plan submitted to your creditors e.g. £30,000 unsecured debts, debt management plan will take 12 + years to pay off, the same debt (reduced) with a ‘Trust Deed’, will be 3 years, debt management arrangement creditors will still contact you until debt is paid, Protected ‘Trust Deed’, they will not.
- Compare this to a debt management plan submitted to your creditors e.g. £30,000 unsecured debts, debt management plan will take 12 + years to pay off, the same debt (reduced) with a ‘Trust Deed’, will be 3 years, debt management arrangement creditors will still contact you until debt is paid, Protected ‘Trust Deed’, they will not.
DISADVANTAGES OF A TRUST DEED
- Existing wage arrestment may not necessarily be revoked, please mention on initial contact, this can usually be resolved.
- If you are self employed some restrictions may apply, although you are usually able to continue to trade