Trust deeds are an arrangement set up between you and your creditors when you are unable to pay off unsecured debts of £8,000 or more. The agreement is legally binding and is set up by a registered insolvency practitioner (known as a ‘trustee’).
Trust deeds are often the last resort for people who are unable to keep up repayments on their debts. It offers one affordable monthly payment which is divided between creditors over a period of four years. Read on to decide whether you should enter into a trust deed.
When Should I Enter Into A Trust Deed?
A trust deed is often the last resort for people who are unable to pay off their debts. It is a voluntary agreement that is an alternative to bankruptcy and allows you to pay your creditors a portion of the overall amount owed.
The debt will be written off after four years with some exceptions. If you are in very serious financial trouble, a trust deed may be the answer. Be aware, entering into a trust deed will affect your credit rating in a similar way to bankruptcy.
Are My Assets Protected?
If you are a home owner, you may be asked to re-mortgage your home to allow you to pay more money towards your debts.
If you are unable to re-mortgage, your home may be at risk of being sold unless you can come up with another means of raising the money. Your trust deed advisor will make you aware of how your other assets could be affected.
What Should I Do Next?
Should you be unable to pay off your creditors and you are in very serious financial trouble, a trust deed could be the option for you. Get advice from Debt Advisory Services (Scotland) Limited to help you decide whether to enter into a trust deed.
If you are struggling with your finances, you are not alone. Contact us for bespoke advice and assistance with debt.