Trust Deeds are a form of personal insolvency in Scotland. They were introduced as a formal debt management solution for Scottish residents and have been revised a number of times since they were first introduced in Scotland.
Every year, thousands of people use Trust Deeds to get themselves out of debt alongside other formal debt solutions known as the Debt Arrangement Scheme and our equivalent of bankruptcy, known as Sequestration.
In order to qualify, your unsecured debts need to outweigh the value of your assets, such as a house or vehicle(s) and you would typically owe a minimum of £5,000. While this is the minimum, there is no recognised maximum amount with some Trust Deeds becoming put in place with over £40,000 of unsecured debts.
Unsecured debts typically include companies that you owe money to such as credit card debts, personal loans and store cards.
Benefits of Trust Deeds
- Debt payments are rearranged over a period of 4 years so that they are affordable for you. After this time any remaining debt is written off.
- Once your Trust Deed is protected, your creditors won’t chase you for payment or add more interest and charges to your debts, and they can’t take any court action.
- You get to protect your home and car.
Risks of Trust Deeds
- Your credit rating will be affected for six years, starting from the date the arrangement is agreed.
- There’s a risk of sequestration if your Trust Deed fails.
- Trust Deeds may affect the terms of your employment for certain occupations. If you’re concerned about this you should check your contract or speak to your human resources department.
When people think of insolvency, bankruptcy or sequestration there is sometimes a stigma attached to these words which can deter an individual from seeking help with debt in Scotland. However, the reality is that many more people every year are using Trust Deeds and the alternative Scottish debt solutions to get their finances back to a manageable level
We have 3,000 debt advice reviews, and this can be a good starting point to find out how other Trust Deed Scotland clients found the process in their own words, which helps to shows that Trust Deeds are an insolvency product which not only helps people with their debt but furthermore allows them to successfully get their lives back on track.