There’s no right or wrong way to get out of debt. It depends on your individual circumstances – how much debt you are in, how many accounts it is spread across, and how much money you have coming in each month.
One option for those in debt is a trust deed. Trust deeds in Scotland are legally binding agreements whereby there is an agreement between you and your creditors to pay an affordable amount each month over a specific period of time.
So, what are the pros and cons of going down this route?
Pros of a Trust Deed
One of the main benefits of choosing a trust deed is that you can keep it private. The agreement will be between you and your creditors – no one else needs to know. You won’t need a guarantor or to involve anyone from your family in any way.
You can have peace of mind because once your trust deed is in place, your creditors will be bound by the terms of the trust deed. Trust deed contributions are based on what you can afford, which enables you to have your debts cleared in a manner that’s manageable for you, rather than allowing your money problems to continue to spiral out of control.
Cons of a Trust Deed
As is the case with all debt solutions, there are a few disadvantages, which you need to be aware of. With a trust deed, you cannot include hire purchase agreements and secured loans. Only unsecured debts are included.
A trust deed can also have a negative impact on your credit rating. It will typically show on your report for six years. Moreover, if you are a homeowner, you may need to release some equity to pay your creditors before you can turn to a trust deed.
If you are interested in a trust deed, Debt Advisory Services Scotland Limited can help. All you need to do is give us a call today on 0800 011 2322 to speak to one of our friendly and experienced team members.