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AD. Roll back 5 years or so and I had debt. Quite a bit. We had moved into a home together, got married and needed to furnish our home in a short space of time. While we were fortunate, that our parents helped out a little with money, we paid for the bulk of our wedding and furnishing our home ourselves. While we managed to work hard and get out of debt by repaying everything, I know this isn’t always an option. Today I’m bringing you a collaborative post to let you know what you need to know about a Trust Deed, to help you work out if it is the right debt solution for you.
A Trust Deed is a debt solution that allows you to deal with unsecured debt. This debt solution is designed for people who live in Scotland, as people in England and Wales have access to an IVA solution instead. Or a DMP.
With a Trust Deed, an arrangement is made between the person in debt and a licensed Insolvency Practitioner to help benefit any of your unsecured creditors. An assessment is carried out, to check affordability, work out what your outgoings are, what essential bills you have to pay and what your daily living expenses are.
Once the amount of money you can afford to re-pay has been calculated you will be advised of the length of time that you need to make the repayments for. This is typically 4 years (48 months) but can be longer in certain cases. Once the agreement comes to an end the rest of the debt that you owe is written off.
Using a Trust Deed, much like an IVA, will see the interest or fees on the debt you owe frozen from the date that the plan starts. This is really useful if you’ve entered a downward spiral of debt where the penalties, fees and interest are racking up so fast that you’ve got no hope of actually repaying everything now. Besides a lottery win! Also, using a Trust Deed means that your creditors can no longer contact you. This is ideal if you’re being pestered by creditors on a weekly or even daily basis. Some creditors can be incredibly persistent, really bordering on harassment, and a Trust Deed will help with that. You can get Trust Deed help from CreditFix.
If you have assets then a Trust Deed can help you retain control of these assets, whereas with bankruptcy you would usually have to sell these assets to help contribute to your debt. A Trust Deed can help you avoid this, but be sure you’re aware of all of the terms and conditions before you sign up too.
The advice on this page does not constitute financial advice, and I am not qualified to give financial advice. I always suggest people ensure they know what they are signing up to and investigate all options available to them. You can learn more about Trust Deeds to educate yourself before making your final decision. Also, if you’re based outside of Scotland you can learn more about IVAs and DMPs.