There are many more than 10 reasons why people enter into a Trust Deed.
Below are ten of the most common reasons and what it would mean for someone in those circumstances.
Find out more about how it works and explore all Scottish debt solutions for a balanced view on what your options are for clearing debt in Scotland.
1. One Affordable Monthly Payment
Lots of people struggle to manage many payments between several different creditors that often add up to an unmanageable sum each month.
You may find yourself unable to clear your overdraft each month and/or be incurring constant bank charges or you may feel you simply have too much debt to cope with.
A Trust Deed allows you to make one affordable monthly payment – based on your disposable income – which is then distributed to your creditors.
2. Write Off A Percentage Of Your Debt
Trust Deed legislation means, once you have completed the terms of your Trust Deed, any remaining debt will be written off.
For example: if your debt was £15,300 and your agreed monthly contribution was £150 over 48 months, you would pay back a total of £7,200 and the remaining £8,100 of your debt would be written off.*
3. Protects your Home
Before the trust deed is agreed, we will arrange a form 1B, which values your house at the start of the Trust Deed and ensures your property is eligible for protection.
4. Get Out Of Debt Quickly
The Trust Deed has an agreed term of typically 48 months, after which all debts included in your plan will be written off.
Other debt solutions last longer lengths of time, such as the Debt Arrangement Scheme (DAS), which lasts up to 12 years or a Debt Management Plan which can last an unlimited amount of time until your debts are paid.
5. Stop Creditors Chasing you for Payments
Once your Trust Deed has been protected your creditors will be prohibited from contacting you, using any method of communication, to try to obtain payments towards your debts.
Try the Trust Deed Wizard to see how Trust Deed Scotland could help you write off a percentage of your debt and step towards a brighter future.
See our Trust Deed Scotland reviews page for thousands of testimonials from people we’ve helped get their finances back on track.
6. Alternative To Sequestration
Unlike with Sequestration, once you have completed the agreed terms of your Trust Deed, you do not need to make any further payments and your debts will be shown as satisfied, which is seen more favourably than bankruptcy on your credit file.
There are also government guidelines relating to Trust Deeds that ensure you have enough money each month to cover the necessities and make your monthly contribution.
The guidelines relating to Sequestration and Minimal Asset Process are much more stringent.
7. Helps You Gain Peace Of Mind
Understandably, being in debt can cause a lot of stress and sleepless nights.
A Trust Deed helps you see the light at the end of the tunnel by having a structured process with a known end in sight.
All you need to do is make the agreed contribution each month and once you have met your Trust Deed terms, all debts included in your plan will be written off.
8. Lifts Wage Arrestments
Once your Trust Deed is protected, any wage arrestments already in place would be lifted and your creditors would be unable to take any further court action against you to recover your debts.
Trust Deed, or Debt Payment Programmes stop court proceedings being initiated.
9. Freezes Interest And Charges
During the Trust Deed, all interest and charges on your debts will be frozen, ensuring you are not simply paying off interest without actually clearing any of your debt, (which commonly happens when people are making token payments or in a Debt Management Plan).
10. Gradually Rebuild Your Credit History
Once your Trust Deed terms have been met, you can begin to rebuild your credit with a clean financial slate.
Your debts will show as satisfied and you can apply for credit the same way as you do when you turn 18. Gradually, from responsible borrowing, you can rebuild your credit score and become eligible for mortgages and other important forms of credit.
*Each person’s contribution is based upon their disposable income, debt level and who their creditors are. These figures are taken from an actual Trust Deed Scotland case.
Help With Debt In Scotland
There are alternative solutions to a Trust Deed, and there are of course Trust Deed pros and cons to consider.
In order to find out your options and what it all means to you, and your situation – you can get help with debt in Scotland from Trust Deed Scotland®
Our experienced debt advisers provide an empathetic, non-judgemental service that’s also confidential and we’ve helped people from all walks of life. After a phone call with you, we provide you will a personalised illustration of your options, and come up with a plan to help get you out of debt.
*Each person’s contribution is based upon their disposable income, debt level and who their creditors are. These figures are taken from an actual Trust Deed review case.