Trust deeds are available to residents of Scotland. They are an alternative to bankruptcy that help people deal with unsecured debt. In fact, a trust deed will typically last for four years and clients would make monthly payments to a trustee, and the trustee would then distribute the monies to appropriate creditors. A trust deed agreement is usually designed according to the budget of the client. The client has to make one singular monthly payment to resolve any outstanding unsecured debts. This article answers the question “What is a trust deed?“
Is A Trust Deed Agreement The Right Insolvency Solution For Your Family?
The client should be a resident of Scotland. His or her unsecured debt should total at least 5,000 pounds. You need a licensed insolvency practitioner to carry out the legal agreement. On the other hand, the client should be able to meet the monthly payment obligation to the trustee. If you have any difficulty meeting your monthly obligations, you should consult with a licensed practitioner. List your current assets and consider what type of monthly contribution you can make to the trust deed. Your assets will be under the control of the trustee under a trust deed agreement. The trust, in this case, is the practitioner.
Do you have any equity in your home? Homeowners should provide this information when entering into a trust deed. The trustee will look at your income and expenses before arriving at a proper amount for your monthly contribution to the trust deed. All of your living essentials will be covered first in order to ensure the trust deed is a viable solution for the client and the creditors.
Scotland Debt Solutions
At Carrington Dean, our experts will make sure their clients are no longer being harassed by creditors. We will converse with your creditors and inform them about the latest situation. The creditors will leave you alone and communicate with us (the trustee), once they know that you have entered into a trust deed.
Trust Deed Protection
A trust deed should be protected so that interest won’t be added to the total amount owed. In fact, a protected trust deed will prevent creditors from seeking legal action against the client in the midst of a settlement. When enough creditors agree to the trust deed, it will be a protected agreement. But there are many instances where trust deeds end up being unprotected for numerous reasons.
At least half of your creditors should agree with the trust deed proposal. Does one creditor hold more than a third of your unsecured debt? Are there any limitations to the types of debt that could be included in a trust deed agreement? Our licensed practitioners will answer these questions for you and evaluate your debt situation before entering into the agreement. In fact, trust deed agreements may include credit card debts, loans, overdraft payments, and more. But secured loans such as mortgages and higher purchase agreements are not included in a trust deed. Any debt that isn’t included in the trust deed will remain part of your calculated costs for essential living. That’s why trust deeds are considered one of the most viable insolvency options for clients who are struggling with personal debt issues.
The End Game
Consider the end game when entering into a trust deed agreement. What will happen when you are not able to pay off the entire amount owed? Any remaining debt will be written off. In fact, creditors will not enter into a trust deed agreement blindly. They know what to expect. Once the agreement comes to an end, they cannot do anything to recover any more monies owed.
The term of a trust deed will last for up to four years. But it will be listed in your credit report for six years. It has an impact on your ability to borrow using credit. Hence, you need to consider this when you decide to enter into a trust deed agreement with your creditors.