Tel: 0141 000 1234
Struggling with debt? ...
Debt Relief Scotland can help. Set up a Protected Trust Deed and write off as much as 90% of your debt in just six weeks!
Questions & Answers ...
How much does a Trust Deed cost?
The Trust Deed cost is based on how much money you can reasonably afford to offer to your creditors each month. This figure is calculated by subtracting your monthly priority debt payments and essential living costs from your monthly income. If you're a homeowner and your home is worth more than any debts secured against it, such as your mortgage, then you may also be required to release some of the equity in it, but only if you can afford to remortgage at the time.
Do creditors have to agree to my Protected Trust Deed ?
No, your creditors are not legally obliged to agree to your Protected Trust Deed. However this does not necessarily mean that the Protected Trust Deed status will not be granted. Protected status will only not be granted if, within 5 weeks of receiving notice of the intention to enter into a Protected Trust Deed, creditors representing a majority in number or at least 33% of the total value of the debt object in writing.
What are the advantages of a Trust Deed?
The advantages of a Protected Trust Deed are as follows:
Your Trustee will deal with all creditor correspondence and queries.
All interest and charges on the debts are frozen on the date the Trust Deed is signed.
Once the Trust Deed has been given protected status, no further action can be taken against you by your creditors.
Will enable you to make a single payment each month during the term of the deed.
After paying the Trust Deed for the defined term, usually 48 months, any remaining debt is written off.
What are the disadvantages of a Trust Deed?
As well as having a number of significant benefits, such discharging you from your liabilities after four years (typically), Trust Deeds also have a number of disadvantages that you need to be aware of before deciding to go ahead with one:
You will be required to release any equity in your property, which could include selling your home if you are unable to remortgage.
Any diligence (debt enforcement) that has already commenced to recover the debts, such as wages or bank account arrestment, will not be stopped by the Trust Deed.
Your credit rating will be affected by entering to a Trust Deed.
If you fail to maintain the payments according to the terms of the trust deed the result may be bankruptcy.
Details are published in the Edinburgh Gazette and added to the Register of Insolvencies.
You cannot acquire further credit over £250 until the Trust Deed has been discharged.
You cannot be a Director of a Limited Company.
Even if your Trust Deed has been granted protected status, your Trustee (or your creditors) can still petition for your sequestration if they can prove it is more beneficial to your creditors).
What happens if I stop paying into the Trust Deed ?
In a Trust Deed, your monthly repayments are calculated on what you can realistically afford, you should take care not to agree to anything that is not sustainable. If you are having trouble maintaining these payments because of a change in circumstances you should contact your Trustee immediately to explain why; failure to do so or if you just stop paying will result in the trustee having to take action. This could include freezing your bank accounts and even petitioning for your sequestration.
How long does it take to set up a Trust Deed ?
It usually takes between 5 - 8 weeks for a Trust Deed proposal to be drafted by the Insolvency Practitioner; this may vary according to the complexity of the case. The proposal is then passed to the creditors for approval, who may then take up to two weeks to approve.
Does a Trust Deed cover all of my debts?
Trust Deeds only incorporate unsecured debts such as loans from banks, money owed to finance companies, credit cards, and store cards. HM Customs and excise (VAT), Inland Revenue and other private loans can also be included in a Trust Deed. A Trust Deed will not include any secured debts, such as a mortgage or a secured loan. You will still be required to maintain any payments to court fines, child support or student loans.
Will the Trust Deed affect my credit rading?
Yes, a Trust Deed does affect your credit rating because you are breaching the original contractual terms of the credit agreement. Once you have successfully completed your Trust Deed it will still show on your credit reference agency files for another two years, which may make it more difficult to obtain credit, although not impossible. You will no longer have any outstanding unsecured debt and will be in a position to start rebuilding your credit rating once again. Six years after the Trust Deed starts, your credit rating will contain no mention of it.