Category: Protected Trust Deed

What debts does a Protected Trust Deed include?

Posted on by Craig Stocks
The type of debts that can be included in a Protected Trust Deed are generally those that are described as unsecured, with some exceptions. When you enter into a Protected Trust Deed in Scotland, most of your unsecured debts will be included and this may include:
  • Credit Cards
  • Personal Loans
  • Overdrafts
  • Catalogues
  • Gas and Electric Arrears
  • Council Tax Arrears
  • Payday Loans
  • Store Cards
  • Buy Now Pay Later Agreements
  • Any Other Outstanding Personal Bill e.g. Vet Bills
There are other debts that can be included in Trust Deeds, but we recommend contacting us today confidential advice as it’s important to understand not only the debts that you have and whether or not debts those can be included in a Protected Trust Deed, but also other aspects include your affordability, total debt owed and your income vs. expenditure. On some occasions, an alternative Scottish debt solution may be more beneficial for you.

What types of debt are excluded from a Protected Trust Deed?

Typical debts that aren’t included within a Protected Trust Deed include:
  • Mortgages
  • Secured Loans
  • PCP and PHP Agreements
  • Hire Purchase Agreements
  • Court Fines
  • TV Licence Arrears
  • Student Loans
  • Child Support Arrears
You can also find out more about the differences between secured and unsecured loans, if you’re unsure what this means.

Can joint debts be included in my Protected Trust Deed?

A joint debt in Scotland is a debt that has your name and the name of the other person you entered into it with on the agreement. A joint debt can be included in a Protected Trust Deed, however, the other person named on the debt will still be responsible for making payments towards it. This is also true of guarantor loan debts in Scotland. If you have some of the debt written off, the other person will still be asked to pay the remaining money back, therefore that debt isn’t written off in the same way that the other debts that included in the Protected Trust Deed would be written off. If you have joint debts, and are thinking about applying for a Protected Trust Deed, you should contact us for confidential advice first. We can let you know how it would affect you and the other person named on the debts.

What happens to my debt during a Protected Trust Deed?

Before Trust Deeds are agreed, proposals are put to the creditors who monies are owed to. If the creditors agree to the Trust Deed, you’ll make monthly payments towards the Trust Deed for 48 months, or 60 months if this was agreed as an extended duration for the Trust Deed. When your Protected Trust Deed has been complete, you’ll be discharged. At this point, any balances outstanding on the debts included in your Trust Deed will be written off.

Is a Protected Trust Deed right for me?

To find out if a Protected Trust Deed is right for you, we advise you to try our online Trust Deed Wizard® tool. This will begin the process of finding a debt solution for you, based on your own unique circumstances. When you’re looking at the types of debts that can be included in a Protected Trust Deed, you may have debts that can be included such as those owed to family and friends but you may benefit from speaking to Trust Deed Scotland® in order to find out the advantages and disadvantages of doing so. There are alternative solutions to Trust Deeds in Scotland, one of which is the Debt Arrangement Scheme. When you speak to an expert money advisor, all pros and cons will be explained to you, and sometimes the type of solution that fits your needs best may not be a Protected Trust Deed after all. When considering your decision on whether a Protected Trust Deed is right for you, we have previously written articles in response to questions we’ve previously been asked such as Is A DAS Worth It? or Is A Trust Deed A Good Idea? Trust Deed Scotland® has thousands of reviews on Trustpilot, however, we also offer Debt Arrangement Scheme and Sequestration advice, which means you will be given balanced, fair advice that puts you in control of the decision-making process.

Is A Trust Deed A Good Idea?

Posted on by Craig Stocks

Is A Trust Deed A Good Idea?

Trust Deeds help thousands of people in Scotland manage their unaffordable debts and reduce their monthly debt repayments to an amount that they can afford to repay on a regular basis. However, Trust Deeds aren’t a solution suitable for everyone and there are alternative debt management solutions in Scotland that can be just as effective or better. You can read more about how a Trust Deed works and the criteria within that link, or you can apply for a Trust Deed online, right now. The decision to proceed with a Trust Deed is based on you, your affordability and what is best for your long-term financial stability, rather than whether a Trust Deed is a good idea or not. Get in touch with Trust Deed Scotland® today and you’ll receive a personalised illustration.

Affordable Monthly Repayments?

The solution(s) open to you will largely depend on how much debt you have and how much you can afford to repay on a regular basis. If you have already defaulted on debts such as credit cards and loans, you may be familiar with income and expenditure guidelines, or budget sheets sent to you from your creditors. The same guidelines are largely available from debt charities and Money Helper websites. These budget sheets will ask you to write down a list of your income and expenditure details and what you usually spend on priority bills such as mortgage/rent and council tax.  These will also include what you spend on travel expenses per month, clothing and many other expenses Whatever monies are leftover is known as your disposable income. These are the funds that you have leftover to repay your debts. A debt charity service or a company such as Trust Deed Scotland® have the experience of advising on the acceptability criteria for these guidelines for these and can work with you to find out any hidden expenses that you may not take into account, and establish what your true disposable income is. This is important because if you are to enter a Trust Deed, or any other form of debt management solution, you will be making a commitment to repay a regular amount over a number of years. Where you fail to keep up the repayment of your Trust Deed, you could end up with a failed Trust Deed, ultimately leading to you being potentially sequestrated. More importantly for you, you would be no better off than when you first sought advice. This is where the experience and trustworthiness of your debt expert is important. Trust Deed Scotland® have advised over [volume] people since 2009 and have gathered thousands of five-star Trust Deed reviews on TrustPilot. We pride ourselves on our commitment to compliance and training. We genuinely want the best outcome for our clients and always have their best interests at heart.

Alternatives to a Trust Deed?

The Debt Arrangement Scheme is a popular alternative debt solution available to residents of Scotland. It’s a statutory debt repayment plan which also uses legislation to allow you to freeze interest and charges and bring your debts under control. There are advantages to the Debt Arrangement Scheme:
  • Personalised debt repayment plan based on your situation
  • Monthly payments will be based on what you can afford
  • Interest on your debt will be frozen
  • Protection against creditor action.
  • Assets protected meaning you will not be asked to sell your house, or your car.
  • Your Money advisor deals with creditors on your behalf.
There are also disadvantages of the Debt Arrangement Scheme:
  • May last longer than the typical 48 months offered by a Trust Deed.
  • Subject to certain conditions. Includes making all payments towards your Debt Payment Plan and paying your monthly expenditure and bills when they fall due. If you fail to make payments, your plan could be revoked.
  • Unable to obtain credit or use an overdraft while you are in a Debt Payment Plan.
  • Credit rating will be affected.
Depending on the severity of your situation, Sequestration may be the best way for you to resolve your debts. On the other hand, a debt consolidation loan or negotiating debt repayment plans directly with your creditors may also be better for you. Refer to our article regarding is a DAS worth it for further information on this solution.

Advantages of Trust Deeds?

There are many advantages of Trust Deeds, a few of which are:
  • Pay back what you can afford.
  • Your Trustee will deal with creditors on your behalf.
  • You will be protected against creditor action.
  • On the successful conclusion of a Trust Deed, your remaining debt will be written off.
  • If you own assets such as a property, you agree with your Trustee in advance whether the Trust Deed affects them.
  • You may be able to remain as the director of a Limited Company.

Disadvantages of Trust Deeds?

  • Your credit file will be updated to reflect that you have signed a Trust Deed. This information will remain on your credit file for six years.
  • As a result of this, you may find it difficult to get credit for a period after your Trust Deed is finalised.
  • For a Trust Deed to become protected, you must convey all your assets to your Trustee. That includes any property that you own. In certain circumstances, it may be possible to exclude your property, but you need to get clear advice on this when you speak to a debt advisor.
  • As mentioned earlier, failure to keep up with repayment of your Trust Deed could result in you being sequestrated. Therefore, it is important that you re fully aware of the Pros and Cons of a Trust Deed and that the amount you repay is realistic for all parties.

Can You Have 2 Trust Deeds?

If you have already been through the process and came out the other end then yes, you can get a Trust Deed twice. If you’re currently in a Trust Deed with a different company then you may also be able to get a second Trust Deed but there are some conditions attached. You can find out more about the process involved in our article on how to get a Trust Deed twice.

How to Get Trust Deed Advice?

If you really want to know if a Trust Deed is a good idea, seek tailored debt advice today. We’re open from 9am to 8pm during the week, and selectively during the weekends. If you do something about your debt today, you don’t need to worry about it tomorrow. Reputable debt advice companies and debt charities are regulated by governing bodies, this should help ensure that you are not ‘sold’ into a Trust Deed and that you are fully aware of the pros, cons and alternatives. Remember, a Trust Deed may not be for you, but that doesn’t mean that you are beyond help. The sooner that you seek help, the sooner you can begin to understand what options are open to you. You can also learn more a similar question of Is DAS Worth It? which investigates the Debt Arrangement Scheme in a similar fashion to the article above of the merits of whether a Trust Deed is a good idea.

What Happens When A Trust Deed Finishes?

Posted on by Craig Stocks
When your Trust Deed comes to an end, your Trustee will issue what’s known as a ‘letter of discharge’. A copy of the letter of discharge will be sent to Accountant in Bankruptcy (AiB), the regulatory body of Trust Deeds in Scotland and the Register of Insolvencies will record your Trust Deed discharge. If you enter a Trust Deed, typically you’ll finish your repayment in 48 months, as long as you made all payments in your plan. Depending on your circumstances, you may have entered into a Trust Deed for an extended period of 5-6 years. Over the term of your Trust Deed, you’ll have made a number of affordable monthly payments – and this will count as ‘full and final settlement’ of the unaffordable debts included in your Trust Deed. At the end of your Trust Deed term, any unsecured debt that you weren’t able to repay during your Trust Deed will be written off. When you are discharged from a Protected Trust Deed, you will be discharged from any outstanding debts from the people you owe money to (your creditors) that you had included at the date you registered your Trust Deed. This means that your lenders are no longer allowed to pursue money that was owed to them when you signed the Trust Deed. However, some debts won’t be written off such as a student loan, or any court fine.

What Happens With Secured Debts After A Trust Deed?

If you owe money that is secured against an asset such as property or a vehicle, it won’t be included in your Trust Deed. Your secured lenders won’t be consulted on whether they agree to your Trust Deed, and they won’t write off monies that you owe them, whether you complete your Trust Deed term or not. However, the fact that you’re in a Trust Deed should make the secured payments easier to make, as your Trust Deed payments would be calculated not to take up any monies that you need for your typical essentials – not just your rent or mortgage, but utility bills, travel expenses and so on. If you’re a homeowner, you might be required to release some equity from your property, so you can repay your unsecured lenders more of what you owe them before they write off the rest. However, you may find that the impact of your Trust Deed on your credit rating makes it harder to release equity. Mortgage providers can see that you’ve entered a Trust Deed, so you might find that it’s harder to get a new mortgage deal, or that you’re charged a higher rate of interest if you do. If you can’t release any equity then your Trust Deed could be extended by 12 months.

Trust Deed Credit Score And History Impact

Information about Protected Trust Deeds and defaults will remain on someone’s credit reports for up to six years after they occur, so they are likely to remain on someone’s credit history even after they have been discharged from their Protected Trust Deed, which normally lasts for 4 years. If you’ve already defaulted on your credit agreements even before considering a Trust Deed, this too will be logged on your credit score.

How Will A Debt Arrangement Scheme Affect My Credit Rating?

When your Debt Payment Programme (DPP) is approved, you’re placed on the DAS register. This is coordinated and managed by the DAS administrator and is available to credit rating agencies. This register, along with other insolvency registers, is added to other information to your credit report, which calculates your credit score. Just like a Trust Deed, or even a simple default notice, the Debt Arrangement Scheme will affect your credit rating for at least six years. However, this may be extended further depending on how long it takes you to pay off your Debt Arrangement Scheme in total. E.g. if you are on a DPP for under 6 years there is no difference, or if you are going to repay a DPP for longer than 6 years; your debts will not be marked as satisfied until the debt has been repaid at the end of the DPP.

What is a Default Notice?

A default notice is usually sent when you’ve missed or paid less than the full amount for three to six months. The default notice will give you at least two weeks to catch up with any missed payments. If you can do this your account will carry on as normal. If you can’t pay the missed payments in this time your account will default. Default notices only apply to debts which are regulated by the Consumer Credit Act, such as credit cards, payday loans, personal loans and store cards. You’ll know a default notice has been served on you when you receive a letter informing you of a ‘Default notice served under section 87(1) Consumer Credit Act 1974’. The most recent revision of this act was in 1983, long before the evolution of the current Trust Deed legislation and the Debt Arrangement Scheme. As the wording of the default notices is quite old, you may, therefore, be directed towards Trading Standards and/or a solicitor – remember this is somewhat outdated legislation and you are advised to instead contact a qualified debt advisor, or debt charity instead. Unless you can get a default notice removed within 2 weeks, this will be recorded on your credit profile for six years. Depending on your lenders criteria, this may have the same affect as a Trust Deed or a Debt Arrangement Scheme registered against your name.

Can You Rebuild Your Credit After a Trust Deed?

Yes, it is possible to begin to rebuild your credit rating after your Trust Deed has finished. Eventually getting a mortgage after a Protected Trust Deed is achievable. It may not always happen immediately and will require a bit of work – it is certainly possible for most people to successfully be approved for a mortgage after a Trust Deed. Also, it will not be possible to obtain a re-mortgage on a home that is still in the Trust Deed, without the Trustee’s permission, until they have discharged their interest. A Trustee’s interest in a property can continue even after the debtor is discharged. It may be that the lending terms are not as favourable as before, however by showing a commitment by making regular payments to utility bills, and by using credit sensibly, purely for the purpose of rebuilding your credit score, you will in time secure a more favourable lending rate. Paying utility bills by direct debit can help rebuild credit after a Trust Deed and even just joining the electoral roll helps prospective lenders build trust in you.

A Brighter Financial Future

Many people in Scotland have approached Trust Deed Scotland® after they’ve put off seeking help over their unaffordable debts for a number of years. So severe are some people’s financial difficulties, that if minimum payments were made only; it may take them longer than two decades to clear their outstanding debts. If you’re struggling with debts and making minimum payments to debts such as credit cards, you may regard protecting your credit score as being more important to you than dealing with the debts you have. This isn’t uncommon. However, anyone pondering the pros and cons of the impact of entering a formal debt management solution may have on their credit score after a Trust Deed finishes should look towards the long term outlook and whether it’s better to essentially press the restart button, or continue on alone waiting for a solution to present itself in another form.

Want Trust Deed Advice?

If you feel you’re struggling with debt, seek tailored debt advice today. If you do something about your debt today, you don’t need to worry about it tomorrow. As well as Trust Deeds and Debt Arrangement Scheme, there are other alternative Scottish debt solutions. Trust Deed Scotland® are able to offer no-obligation, confidential advice on all debt management methods available in Scotland. Call us on 0141 221 0999 or try our Trust Deed Wizard® tool to get started today.

What’s The Minimum Level of Debt For Trust Deeds?

Posted on by Craig Stocks

Do I Need A Minimum Level of Debt to be Considered For A Trust Deed?

As with all debt solutions in Scotland, Trust Deeds are specific to your individual circumstances. Typically, you would have a minimum level of debt over £5,000 to qualify for this debt solution. In 2019, with over 10,000 Protected Trust Deeds, the average total debt owed to creditors was £14,900*. However, there are many considerations selecting the correct solution for you, that’s why we need you to contact us for more information – to establish the facts and then provide you with a personalised illustration of all the options open to you. Ultimately, all debt advice is tailored to you, and any company that has your best interests at heart wouldn’t try and ‘sell’ you into a solution that is not fit-for-purpose. Trust Deeds have helped thousands of people look forward to a brighter future; however, in order for the Trust Deed to be successful for you, you would need to have an income that allows a regular repayment over that time. The more important question is not such do I need a minimum level of debt to be considered for a Trust Deed, but can I afford to make regular payments to my Trust Deed and is the Trust Deed the best solution for you, depending on your circumstances. If not, there are alternatives to a Trust Deed. Trust Deeds are only available to Scottish residents and you must have lived in Scotland for at least six months before you apply. If you are based in England or Wales, then debt solutions such as an Individual Voluntary Arrangement may be a suitable alternative for you.

Who qualifies for a Trust Deed?

To qualify for a Trust Deed you would usually:
  • Have at least one debt
  • Have over £5,000 of debt
  • Be resident in Scotland
  • Be able to repay your debt(s) after you’ve paid your living expenses
  • Have an income
Find out more about Trust Deed Pros and Cons. There is no maximum level of debt as such, however, affordability and being able to repay a contribution is important.

Do I Need A Minimum Level of Debt to be Considered For A Debt Arrangement Scheme?

There is no set minimum level of debt required to be considered, however, Trust Deed Scotland typically suggests that the Debt Arrangement Scheme may an option if you have over £3,000 of unsecured debt. Debt Arrangement Scheme is designed to help individuals, couples, and businesses repay their unaffordable debts. It also helps creditors recover debts they are due. To be eligible for DAS, a debtor must have one or more debts and:
  • Be a resident of Scotland
  • Have sought the advice and assistance of a DAS-approved money adviser
  • Want to repay their debt without the threat of creditors taking legal action against them
  • Have a reasonable level of disposable income after meeting their basic needs

Joint Debt Arrangement Scheme

Couples who are each liable for a debt which may be included in a debt payment plan. You may apply for a joint debt payment programme if you are:
  • Spouses or civil partners of each other
  • Living together as spouses or civil partners of each other
  • Both applicants must consent to the proposal

Business Debt Arrangement Scheme

Self-employed individuals, partnerships, trusts or unincorporated bodies can also seek to repay their debts over a period of time, up to a maximum of five years, through DAS. Businesses excluded from the Debt Arrangement Scheme are:
  • Limited or public companies
  • Not formed under Scots law
  • Those established or carrying on business outside of Scotland
Find out more about the Debt Arrangement Scheme Pros and Cons.

Do I Need A Minimum Level of Debt to be Sequestrated?

To qualify for Minimal Asset Process, your debts would be more than £1,500 but less than £17,000. In order to apply instead for Sequestration, your debts total more than £3,000. It will cost you £200 to apply for Sequestration via the full administration route or £90 if applying via the Minimal Asset Process route. There are no waivers or exemptions for this fee and it is non-refundable. Payment can be made by cash, cheque, debit card, or postal order. There is also an option to pay online. Find out more about the advantages and disadvantages of Sequestration.

Where Can I Get Online Debt Help In Scotland?

  You can get online debt help today with Trust Deed Scotland®. There are a variety of debt solutions available in Scotland to help deal with your debts, regardless of the minimum or maximum amount of debt that you owe. You can find out more about the solutions by visiting our online debt advice page Or, if you would prefer to speak a Scottish debt solutions specialist, you can give us a call on 0141 221 0999 to find out more. Any advice offered is tailored, balanced, and non-judgemental. *Information provided by the Scottish government

Differences Between IVAs And Trust Deeds

Posted on by Craig Stocks

What is the Scottish version of an IVA?

An IVA in Scotland (Individual Voluntary Arrangement) is better identified as the equivalent Protected Trust Deed formal debt solution. If you are a resident in Scotland the Protected Trust Deed is a solution that could help you write off unaffordable debt and enjoy a brighter future.

What’s the Difference Between an IVA and a Trust Deed?

The main differences between an IVA and Trust Deed are that the Individual Voluntary Arrangement is an English, Northern Irish and Welsh formal debt solution. A Trust Deed is a formal debt solution for Scottish residents only. An IVA can only be applied for by English, Northern Irish and Welsh residents. Therefore Trust Deeds are only available for Scottish Residents (or have lived in Scotland in the last 12 months). In an IVA you must have minimum unsecured debts of £6,000* whereas in a Trust Deed the minimum total debt level of over £5,000. The duration of the debt management process is different in that an IVA typically lasts for 60 months whereas a Trust Deed typically lasts for 48 months. In order to qualify for a Trust Deed – you must live in Scotland or have lived in Scotland in the last 12 months. You may also qualify if you have a place of business in Scotland. It isn’t unusual for a person living and working in England, Wales or Northern Ireland to enter a Trust Deed, or complete their Trust Deed term while resident in one of these countries as long as they met the above criteria regarding residency in Scotland. Likewise, It’s not unheard of for British ex-pats to move abroad while in an IVA or Trust Deed and continue with their repayments while living there – it’s fairly normal for people from Scotland to continue with their Trust Deed while living in another country of the United Kingdom, or any country overseas. Sometimes you may read about a Scottish IVA online, or you may have received an email, or seen an ad on social media talking about individual voluntary arrangements, that invited you to apply for an IVA. This is often an oversight from organisations based in England. Occasionally companies that are based Overseas, or in England acquire ‘UK data’ to cold-call by salespeople who are not qualified to give advice which further adds to the confusion. Trust Deed Scotland® have helped over [volume] and specialises in Scottish debt solutions and our experienced debt advisers are experienced in advising on not only Trust Deeds but other Scottish debt solutions which include the Debt Arrangement Scheme. There are other subtle differences between IVAs and Trust Deeds and there are other differences in what’s known as a Debt Relief Order for example, with our Scottish equivalent’ known as the Minimal Asset Process.

What are the similarities between an IVA and a Trust Deed?

Whilst there are differences between an Individual Voluntary Arrangement and Protected Trust Deed, there are also many similarities between an IVA and a Trust Deed. Most importantly, both solutions exist to help people in the UK reduce their debts down to an affordable level, and take back control of their personal finances.
    • You should owe money to two or more creditors
 
    • Your contributions are based on your ability to pay and you need to have a monthly income
 
    • Only unsecured debts can be part of the agreement
 
    • Interest and charges on all included debts are typically frozen
 
    • Any unpaid debts at the end of the arrangement term are written off, allowing you to look forward to a brighter future
 
    • Both IVAs and Trust Deeds are a good alternative to Bankruptcy / sequestration
 
    • Neither An IVA or a Trust Deed impact on your ability to hold public office or be a company director
 
    • All windfalls including inheritances, bonuses, and lottery wins in excess of £500 must be declared
 
    • IVAs and Trust Deeds are recorded on the Gazette register
 
    • Your credit record will be affected by your IVA or Trust Deed and they will appear on your credit file
Both solutions offer Self-Employment help to individuals with debt.

London, Belfast and Edinburgh Gazettes

Creditors can access details of your insolvency through the equivalent regional Gazette. Details of your IVA or Trust Deed won’t be published in a local or national newspaper but creditors can access your information through this route. This means it’s unlikely that your friends, family or neighbours would find out about your finances in this way. The exception to this would be if there has been a high level of public concern or complaint about your financial conduct. An IVA is listed in the London or Belfast Gazette and the Trust Deed is listed in the Edinburgh Gazette. In Wales, there is no Cardiff Gazette, so therefore these are listed in the London Gazette.

How to Apply for a Trust Deed Today

When considering whether to apply for a Trust Deed or any other type of debt solution, It’s only natural for people to ask questions like Is a Trust Deed worth it Is a Trust Deed a good idea Debt Arrangement Scheme vs. Trust Deeds You may have already spent countless hours researching debt solution options, or you may not have had the confidence to explore any options yet as for many people, taking the first step of asking for help can be too difficult to overcome. In any situation where you are faced with unaffordable debts, we always advise that you seek tailored debt advice and at Trust Deed Scotland – we always have your best interest at heart. After speaking to our debt advisers – we’ll provide you with a personalised illustration of all options open to you and their advantages and disadvantages. Our highly-experienced debt advisers offer non-judgemental, balanced advice. They’ll help you to understand that it’s not necessarily a one-size-fits-all solution that suits your needs, but that the way out of financial difficulties for you depends on what best suits your needs and affordability. Call us today on 0141 221 0999 or apply for a Trust Deed today by using our Wizard tool. *To qualify for an IVA officially, there is no minimum debt level. The reason why £6,000 is given here as a guideline is that this is the most common amount that Insolvency Practitioners will work with when checking to see if a customer can qualify for an IVA. You may find when you have spoken to an Insolvency Practitioner that if your unaffordable debt level falls below £6,000 that they will decide on a case by case basis as to whether they will put your IVA application forward, dependent on the amount that you can afford to repay and the amount of work involved for them.

How long does a Trust Deed last in Scotland

Posted on by Craig Stocks

How long does a Trust Deed last in Scotland?

Trust Deeds offer a way out of unaffordable debt and the chance to rebuild your credit once the Trust Deed term has ended. The Trust Deed is a debt solution that’s only available to residents of Scotland and typically lasts for 48 months although there are some factors that can affect the length of time that a person would be in a Trust Deed. One of the major factors in the length of your Trust Deed is whether or not you own your own property. Many individuals have concerns that their house might have to be sold when they enter a Trust Deed, but this is not automatically true, as the outcome largely depends on the level of equity available in the property. A popular alternative to a Protected Trust Deed in Scotland is known as the Debt Arrangement Scheme (DAS) which offers much of the same protection that a Trust Deed does, but without the ‘debt write off’ aspect. However, depending on the total debt you have, and your ability to repay – it is possible that you could repay your debt back quicker than the time it would take you to repay your debts using a Trust Deed.

Using property as part of a Trust Deed

When considering how long does a Trust Deed last in Scotland – If your home is mortgaged, the equity figure will be the property’s value minus the amount needed to repay the mortgage. There is minimal benefit for the Trust Deed administrator to use the property as part of a settlement if the equity is minimal. Similarly, should you decide to sell your home, you may be able to end the Trust Deed earlier than the initial 48 months if your creditors are repaid in full plus interest and all the Trust Deed costs have been covered.

Where a Trust Teed lasts longer than four years

A Trust Deed can last longer than the standard term of 48 months in certain circumstances:
  • If the Trustee negotiates low monthly payments in comparison with your overall debt, it may then be necessary to extend the Trust Deed term so that creditors will be more likely to approve the arrangement.
  • Some other Trust Deed companies charge excessive fees when arranging Trust Deeds, which results in a longer-term than forty-eight months.
  • If you were to inherit money or receive a windfall during the term of your Trust Deed, it’s likely that the Trustee will either increase your repayments or extend the Trust Deed term to provide your creditors with a higher return.
  • There is also a possibility that your personal circumstances could change during the initial 48-month term. Redundancy, or being unable to work due to ill health is two examples. In these cases, your Trustee may allow you to take a payment ‘holiday’ but extend the term at the end of the Trust Deed.
It’s important to take care when approaching Trust Deed companies to ensure they are reputable – in particular, be wary of excessive Trust Deed fees that might result in a needlessly extended term. Trust Deed Scotland has gathered over [reviews] five star Trust Deed reviews on Trustpilot. A signal that we are a Trust Deed provider that can be trusted to give you the correct advice.

What happens at the end of a Protected Trust Deed?

  At the end of your Trust Deed term, any debts remaining are written off, and your details are removed from the Trust Deed register within three months. You’ll also receive a certificate of completion from your Trustee to confirm that you’ve met your obligations. Where your credit file is concerned, it typically will be amended to show that the Trust Deed has been successfully completed. It will be difficult to obtain credit or other borrowing for several years after the Trust Deed. Approximately how long after a Trust Deed could you get a mortgage? This largely depends on the lender, but it’s likely that you’ll pay a higher interest rate than a ‘standard’ mortgage if you’re successful with an application. Trust Deed Scotland® has extensive experience of negotiating trust deeds on behalf of our clients and can provide reliable and comprehensive trust deed information. The length of a trust deed is an important aspect of the arrangement, as it determines when you can start to rebuild your financial life. Call one of our debt advice experts to find out more about your options.

Is a Trust Deed a good idea?

Trust Deeds can be a valuable aid to help you manage unaffordable debts and look forward to a lift after debt. However, they are not right for everybody and there may be more suitable debt management solutions for you. You can call us on 0141 221 0999 for confidential advice tailored to your needs. Our non-judgemental and experienced debt advisers have helped over [volume] people and that advice includes all other debt management techniques in Scotland.

Trust Deed alternatives?

There are alternatives such as the Debt Arrangement Scheme. Minimal Asset Process and Sequestration. The solutions offered to you will depend on your affordability and your situation. Every person’s situation is unique and therefore the options open to them will vary from case to case.  You may find that when you ask the question of how long a Trust Deed lasts in Scotland, how long it will take you to become debt-free if you pursued these other options.

Where else can I get money advice in Scotland?

To find out more about managing your money and getting free advice, visit Money Helper, an independent service set up to help people manage their money.

5 Trust Deeds Questions

Posted on by Craig Stocks
When it comes to trust deeds, there are certain questions people commonly have. Here at Trust Deed Scotland, we’ve compiled 5 Trust Deeds Questions, as well as the answers to each of them, to help you stay in the know.  

What is the difference between a trust deed and sequestration?

Trust Deeds differ from sequestration, or bankruptcy, in a number of ways:
  • A trust deed is less formal than sequestration and doesn’t involve the court – it’s a private contract between you, your trustees and your creditors
  • If you’re a homeowner, you can still keep your home if you enter a Trust Deed
  • Unlike sequestration, you can borrow money without disclosing your status, be a company director, and qualify for elected public office
Where they’re similar, though, is the minimum period for contributing to an insolvency estate. Recent legislation changes have increased this time for sequestrations from three years to four, on par with trusts deeds. This is thought to be the main reason why trust deeds today exceed sequestrations, according to government statistics – with no difference in the period of contribution, more and more people are shunning bankruptcy and going for the more ‘positive’ trust deed option.  Yes, a trust deed does affect your credit rating. This is because entering one means you’re breaching the original terms of your credit agreement. However, remember that if you’ve already missed credit payments or are paying your creditors decreased amounts, your credit rating may have been negatively affected, to begin with. After you’ve completed a Trust Deed, it will show on credit reference agency files for another two years. Your credit rating will stop mentioning it when six years have passed since you first entered a trust deed.

When does a Trust Deed become protected?

A trust deed becomes protected once the majority of your creditors (two-thirds by debt value, or more than half by number) agree to the proposal. They can then no longer contact you for any reason or start any legal proceedings against you to recover debt. However, you should know that even after your trust deed becomes protected, your trustees or creditors can still seek for your sequestration if they’re able to prove that it will give more back to your creditors than what a trust deed would. For more information on the Debt Arrangemennt Scheme, see our related article What is a DAS?

What is the minimum debt level required to take out a trust deed?

The minimum debt level needed to enter a trust deed with Trust Deed Scotland is £5,000 (as compared to £3,000 for sequestration). Keep in mind that there are some trust deed providers that may require higher levels of debt for them to take on your case. And of course, you also need to have been a resident in Scotland for a minimum of six months and have an income, or someone willing to act as a third party, for you to qualify for a trust deed.  

Trust Deeds Questions – Additional Queries Not Answered Here?

Setting up a trust deed with Trust Deed Scotland is easy. Enter your details on our website or call our office to arrange a free meeting with one of our debt advisors, who’ll then let you know all your options and help you find the best debt solution for you. Once we have all the information we need from you, we’ll start drafting your case. At this point, we’ll also help you set up your first trust deed payment, which means you can immediately stop any current payments to your creditors. Before you start setting up a trust deed, though, try our Trust Deed Wizard to see exactly how one could help you become free of debt. There are many more than just 5 Trust Deeds Questions. There are other alternatives in Scotland too. Get answers to more of your questions about financial options on our debt solutions.

10 Trust Deeds Reasons

Posted on by Craig Stocks
There are many more than 10 reasons why people enter into a Trust Deed. Below are ten of the most common reasons and what it would mean for someone in those circumstances. Find out more about how it works and explore all Scottish debt solutions for a balanced view on what your options are for clearing debt in Scotland.

1. One Affordable Monthly Payment

Lots of people struggle to manage many payments between several different creditors that often add up to an unmanageable sum each month. You may find yourself unable to clear your overdraft each month and/or be incurring constant bank charges or you may feel you simply have too much debt to cope with. A Trust Deed allows you to make one affordable monthly payment – based on your disposable income – which is then distributed to your creditors.

2. Write Off A Percentage Of Your Debt

Trust Deed legislation means, once you have completed the terms of your Trust Deed, any remaining debt will be written off. For example: if your debt was £15,300 and your agreed monthly contribution was £150 over 48 months, you would pay back a total of £7,200 and the remaining £8,100 of your debt would be written off.*

3. Protects your Home

Before the trust deed is agreed, we will arrange a form 1B, which values your house at the start of the Trust Deed and ensures your property is eligible for protection.

4. Get Out Of Debt Quickly

The Trust Deed has an agreed term of typically 48 months, after which all debts included in your plan will be written off. Other debt solutions last longer lengths of time, such as the Debt Arrangement Scheme (DAS), which lasts up to 12 years or a Debt Management Plan which can last an unlimited amount of time until your debts are paid.

5. Stop Creditors Chasing you for Payments

Once your Trust Deed has been protected your creditors will be prohibited from contacting you, using any method of communication, to try to obtain payments towards your debts. Try the Trust Deed Wizard to see how Trust Deed Scotland could help you write off a percentage of your debt and step towards a brighter future. See our Trust Deed Scotland reviews page for thousands of testimonials from people we’ve helped get their finances back on track.

6. Alternative To Sequestration

Unlike with Sequestration, once you have completed the agreed terms of your Trust Deed, you do not need to make any further payments and your debts will be shown as satisfied, which is seen more favourably than bankruptcy on your credit file. There are also government guidelines relating to Trust Deeds that ensure you have enough money each month to cover the necessities and make your monthly contribution. The guidelines relating to Sequestration and Minimal Asset Process are much more stringent.

7. Helps You Gain Peace Of Mind

Understandably, being in debt can cause a lot of stress and sleepless nights. A Trust Deed helps you see the light at the end of the tunnel by having a structured process with a known end in sight. All you need to do is make the agreed contribution each month and once you have met your Trust Deed terms, all debts included in your plan will be written off.

8. Lifts Wage Arrestments

Once your Trust Deed is protected, any wage arrestments already in place would be lifted and your creditors would be unable to take any further court action against you to recover your debts. Trust Deed, or Debt Payment Programmes stop court proceedings being initiated.

9. Freezes Interest And Charges

During the Trust Deed, all interest and charges on your debts will be frozen, ensuring you are not simply paying off interest without actually clearing any of your debt, (which commonly happens when people are making token payments or in a Debt Management Plan).

10. Gradually Rebuild Your Credit History

Once your Trust Deed terms have been met, you can begin to rebuild your credit with a clean financial slate. Your debts will show as satisfied and you can apply for credit the same way as you do when you turn 18. Gradually, from responsible borrowing, you can rebuild your credit score and become eligible for mortgages and other important forms of credit. *Each person’s contribution is based upon their disposable income, debt level and who their creditors are. These figures are taken from an actual Trust Deed Scotland case.

Help With Debt In Scotland

There are alternative solutions to a Trust Deed, and there are of course Trust Deed pros and cons to consider. In order to find out your options and what it all means to you, and your situation – you can get help with debt in Scotland from Trust Deed Scotland® Our experienced debt advisers provide an empathetic, non-judgemental service that’s also confidential and we’ve helped people from all walks of life. After a phone call with you, we provide you will a personalised illustration of your options, and come up with a plan to help get you out of debt. *Each person’s contribution is based upon their disposable income, debt level and who their creditors are. These figures are taken from an actual Trust Deed review case.

10 Trust Deeds Misconceptions

Posted on by Craig Stocks
At Trust Deed Scotland® we speak to people every day who have been misinformed in the past about Trust Deeds and how they affect the people who enter them in order to step towards a brighter future. Below are 10 of the most common Trust Deeds misconceptions about Trust Deeds straightened out.  
  1. You will lose your home if you enter a Trust Deed.
This used to be a problem but legislation introduced the form 1B which is addressed at the initial stages of the process, before the Trust Deed is finalised. It ensures a valuation of your property is done and that your property is eligible for protection, before you enter into the Trust Deed.  
  1. Your details will be put in the newspaper if you enter a Trust Deed.
In the past, advertisements were place in the Edinburgh Gazette but this is no longer the case. All those who enter into a Trust Deed are placed on the Accountancy in Bankruptcy (AiB) Register and stay there until 1 year after your trustee discharges from the Trust Deed. Most people have never accessed this unless they work in insolvency and debt solution, so it is not as though your family or friends will come across it by accident.  
  1. Trust Deeds and Bankruptcy/Sequestration are the same thing.
Trust Deeds and Sequestration (Scottish Bankruptcy), have many important differences. Bankruptcy remains on your credit file and you will often be asked on application forms if you have ever been declared bankrupt which could affect your ability to obtain credit indefinitely. Trust Deeds do not show on your credit file 6 years after entering into one. If you are a homeowner and you become bankrupt, you would lose your property, which is not the case with a Trust Deed. Once your Trust Deed term has been completed, you would not make any further payments to your debts but with bankruptcy, depending on your income, you may have to pay into your debts after your bankruptcy has been finalised. If you enter into a Trust Deed, there are government guidelines to ensure you have enough income each month, after your Trust Deed contribution to cover your necessities. This includes things such as: food; housekeeping; rent/mortgage; council tax; gas; electricity; home insurance; life insurance; telephone; internet; television and other expenditure. The guidelines with bankruptcy are much more stringent and you would lead a heavily restricted lifestyle. You also need to pay £200 to apply for bankruptcy, whereas all Trust Deed fees are included in the agreed monthly contribution.  
  1. Your family, friends or employer will find out you are in a Trust Deed.
In the majority of cases, you don’t need to tell anyone at all you’re entering a Trust Deed if you don’t want to. The exception is, people in certain lines of work, (usually positions of high authority or financial responsibility), check your contract and terms of employment or HR department if you are unsure if this applies to you.  
  1. Your income is too high or low to enter a Trust Deed.
Each Trust Deed is considered on a case by case basis. Your income and expenditure, debt level and who your creditors are can all play a part in the process. If your disposable income is high, you may pay a larger contribution than some other people but in the majority of cases, this contribution is still vastly less than what you would be paying prior to entering a Trust Deed, all interest and charges would be frozen and you would write off a percentage of your debt. If you are a low earner you can still qualify if someone you know can act as third party to ensure the contribution will be met each month. Once you discuss your personal circumstances with a debt advisor, they can give you an indication of what to expect. The majority of cases we deal with do not have any problems relating to this.   Try our Trust Deed Wizard tool to see how we could help you turn your finances around.
 
  1. You won’t be able to get credit in the future if you’ve been in a Trust Deed.
You won’t be able to get credit while you are in the Trust Deed but once you complete your agreed Trust Deed term, you can begin applying for credit again and rebuild your credit history. The Trust Deed will show on your credit file for 6 years in total, (from the date it was entered). As most Trust Deed terms are 48 months, this means it would show on your credit file for 2 years after you are discharged from your Trust Deed. During this two year period you may find it more difficult to obtain credit but you can begin rebuilding your credit score. See our blog, How Trust Deeds affect your Credit Rating, for advice on how to rebuild your credit score.  
  1. You would have to give up your mobile phone, Sky/Virgin/Netflix television and other direct debits in other to enter into a Trust Deed.
As stated earlier, when people enter into their Trust Deeds, there are government guidelines in place to ensure you can cover your monthly necessities and your Trust Deed contribution. As long as your outgoings stay within these guidelines, you will not have to cancel any of your direct debits. Only excessive expenditure is not permitted as it would suggest you could contribute more to your debts.  
  1. Entering a Trust Deed is something to be embarrassed or ashamed about.
This is simply not the case. Although you may feel like you are the only person you know struggling with debt, we help thousands of people each year. The chances are you know or have come into contact with many people who are in a Trust Deed but you simply didn’t know it. We’ve already given advice to over [volume] people in Scotland, for over a decade. People get into problems with debt for many different reasons and the fact you are accepting that you need some help and want to get your finances turned around shows you are responsible and committed to changing your life for the better.  
  1. You can shop around to find the lowest Trust Deed contribution.
Your Trust Deed contribution is calculated based on what your debt level is, what your creditors will accept and the amount of disposable income you have. This figure will not change based on what company you deal with as they are all working within the same government guidelines. The importance of what company you choose lies in the training and quality of the debt advisors and how much support you will be given throughout the process. Our advisors are here to help every step of the way from the second you pick up the phone to when you complete your Trust Deed. See our reviews page for thousands of independently written Trust Deed reviews.  
  1. Entering into a Trust Deed would affect the credit of others living in your home.
Trust Deeds are an individual process and only affect you. The only way it may affect your partner is if you have joint debts. Otherwise, it will have no effect whatsoever on the credit history of anyone else living in the property and they needn’t even know you are in a Trust Deed as all correspondence will be confidential. We hope that reading our 10 Trust Deeds Misconceptions guide has helped to appease any anxieties that you may have about whether you would be eligible for a Trust Deed. For more information, find our downloadable Scottish Debt Help Guide or Contact Trust Deed Scotland today.

Recommended further reading

Is a DAS worth it? Is a Trust Deed a good idea? Differences between IVAs and Trust Deeds What debt does a Protected Trust Deed include?

10 Common Trust Deeds Questions

Posted on by Craig Stocks
We often receive calls at Trust Deed Scotland from people asking questions about Trust Deeds. We’ve compiled a list of some of the most commonly asked questions so that you can learn more about the process.

1. How do I set up a Trust Deed?

First common trust deeds questions answered – Enter your details onto the website to arrange a call back, or call the office to arrange an appointment with an experienced debt adviser. The advisor will explain all the options available to you and you can then make an informed decision on whether to proceed with a Trust Deed or another solution. If you decide you would like to proceed with a Trust Deed, we will draft your case as soon as we have received the necessary documentation. Your advisor will give you a checklist of the necessary information. Once your case is drafted, you will receive a call from the insolvency practitioner to confirm the details in your paperwork are correct. After this, your advisor will arrange a final meeting with you to finalise the paperwork and answer any questions you may have. Finally, they will help you set up your first contribution payment and once this is done you can stop paying your creditors directly. Always check with your insolvency practitioner to make sure everything is finalised and you are at the stage where you can cancel payments to your creditors.

2. What if I own my own home?

Second common trust deeds questions answered – You can enter a Trust Deed if you own your own home or if you are a tenant, or living with parents or family. At the beginning of the process, you will be given the opportunity to complete a 1b form which ensures your property is protected, provided you meet the terms of your Trust Deed.

3. Will it cover all my debts?

Third common trust deeds questions answered – It would cover all unsecured finances, excluding student loans or any charges incurred due to fraudulent benefit claims or court fines accrued relating to this. There may be some typical exclusions or grey areas such as a guarantor loan. However, these would be investigated and our debt experts would ensure that any doubt would be immediately resolved, or explained. Remember too that other solutions exist such as Debt Arrangement Scheme.

4. Will I need to have a credit check done?

Fourth common trust deeds questions answered – No, you will not need to have a credit check carried out but a credit check could help verify you creditors and the amounts you owe. This is a good idea if you have additional debts you may have forgotten about or are unsure about who you owe money to.

5. Is a Trust Deed the same as bankruptcy?

Fifth common trust deeds questions answered – No, Trust Deeds and bankruptcy, (called sequestration in Scotland), are not the same. One of the major differences between the two is, if you are a homeowner, you can keep your own home in a Trust Deed but this isn’t always possible with bankruptcy. Click on the following links to find out more about Sequestration and Minimal Asset Process, (MAP). Try the Trust Deed Wizard to see how a Trust Deed could help you. Or, find out how it works.

6. Do I have to tell my family or friends?

Sixth common trust deeds questions answered – As long as you have individual debts, (they aren’t joint with anyone), you do not need to tell anyone at all if you don’t want to. We will never disclose your status to anyone and all correspondence will be discrete.  

7. What if I am self-employed?

Seventh common trust deeds questions answered –  You can apply for a Trust Deed if you are self-employed as long as you can provide evidence of income, accounts and invoices.  

8. What if I stop paying my agreed monthly contribution?

Eighth common trust deeds questions answered – If there is a valid reason you cannot pay your Trust Deed contribution, contact your insolvency practitioner immediately. It is possible to arrange a payment holiday for extenuating circumstances. If you stop paying your agreed contribution without good reason or without contacting your insolvency practitioner, they may discharge themselves from your Trust Deed, meaning your creditors will resume chasing you for the full outstanding balances, they may request a wage arrestment against you or you could be made bankrupt.  

9. Will my credit rating be affected?

Ninth common trust deeds questions answered – Yes, your credit will be affected but if a Trust Deed is the best option for you, it is best to take charge of your finances as soon as you can. If you have not defaulted on any payments but have a high level of unsecured debt, you will find yourself in the position where lenders will not consider giving you any more credit, even if you have a high credit score. This is because the acceptance process is means-tested and even if you have never missed a payment, there will come a time when what you owe exceeds the realistic probability that you can pay it back based on your income and expenditure.  If you have already defaulted on payments to your creditors, your credit will already be negatively affected and each default will show on your credit file for 6 years. Once you have been discharged from your Trust Deed, you can rebuild your credit.  

10. What would a Trust Deed mean for my future?

Tenth common trust deeds questions answered – all debts included in your plan will be written off and you are now able to rebuild your credit score. This would allow you to apply for mortgages, higher purchase loans to buy a car and credit cards. These are things you would never be able to do with poor credit. You will also be free from the stress of having a lot of debt and having multiple creditors chase you. If you have more questions you’d like us to answer, view our Scottish Debt Help page or Contact Trust Deed Scotland today.

Call us on 01412210999 for any other Trust Deeds Questions!

Call 01412210999 for any other Trust Deeds questions you have. The team at Trust Deed Scotland are here to help and honestly, there are no Trust Deed questions that we’ve not answered before.