A trust deed in Scotland could help you overcome your debt problems.
Many people have been successful in paying off their creditors without getting into legal or financial issues.
I have compiled this complete guide to help you understand how you could benefit from a trust deed.
What will happen if I can no longer make my monthly payments in a trust deed?
In case you have unsecured debts that you are unable to pay off, you could contact your trustee to reevaluate your deed of trust.
Your trustees could use legislation that could stop you from making payments. After evaluating your financial situation and contacting your creditors, your monthly payments could either be reduced or you could get a relief.
If you are lucky, your trust deed could even be written off. However, this depends on the amount of debt you have.
What is the age limit for entering a trust deed?
There is no age limit for entering a trust deed.
However, you are expected to be at least 18 years old. This is because you might not be allowed to borrow money under the age of 18.
Moreover, there is no maximum age for applying a trust deed. As long as you are able to contribute to your monthly payments on time, you could apply for a trust deed.
Is a trust deed in Scotland worth it?
A Scottish trust deed could help you reach financial stability.
You could benefit from a trust deed in several ways. These include:
- Your interest and charges will be frozen.
- You could add almost any type of unsecured debt in your trust deed.
- Almost 75% of your unsecured debt could be written off.
- Your remaining debt will be written off after an estimated period of 4 years.
However, they could be risky if you do not have a stable monthly income.
Can I go bankrupt because of a trust deed?
Unfortunately, yes. However, it is highly unlikely.
If you are able to make your monthly payments on time and continue to cooperate with your trustees, you might not have to face a sequestration.
How do I review my trust deed?
It is highly essential that you review your trust deed after the documentations are complete.
- Understanding who your trustee is
- The role of your trustee
- That your documentations are stamped and signed
- Your beneficiaries
- When does your trust deed end
- How much monthly payment you need to make
Can my creditors contact me whilst in a trust deed?
If you have signed the trust deed through a licensed insolvency practitioner, you won’t have to worry about your creditors contacting you.
Your trustee will look over your payments and contact your creditors for you.
Will my pension funds be protected in a trust deed?
Yes, your private pension funds will be protected in a trust deed.
Your trustee can not force you to withdraw your pension funds.
After you have received your letter of discharge, you could continue to build your pension funds.
Is my car and home at risk?
No, it is highly unlikely that your assets will be at risk once you get into a trust deed.
However, the ownership of your assets needs to be transferred in the name of your trustee.
In case you have a lot of equity in your name, your trustee could ask you to remortgage it.
There is a high chance that you would be able to keep your car as well. This is mainly because a car is considered as an essential.
Can I have more than one trust deed?
You could be able to get into a trust deed more than once.
However, your previous history has to be clear. Once you have been discharged from your previous trust deed without any complications, you could ask your trustee to set up another one for you.
Moreover, if you are in a trust deed, you could be able to get another agreement with a different company. However, it is important to understand that there will be conditions attached to it.
I would advise you to speak to your trustee to get better information.
Frequently asked questions ( FAQs)
How do I open an account for a trust deed?
Once you get into a trust deed, your trustee could ask you to open a new bank account.
You will be required to bring a certificate of your trust deed agreement.
After signing your documentations, the account will be held in your trustees name.
Moreover, your bank will require a tax identification number for your trust.
Why choose a trust deed?
Trust deed is one of the most used and effective ways to get rid of your unwanted debts in Scotland.
Can I improve my credit rating in a trust deed?
You could be able to improve your credit rating once you are relieved of your debt charges.
However, this could take at least 6 years. After that you have a clean slate. You could be able to rebuild your credit score.
Can my trust deed last longer than 4 years?
Yes, it is possible that your trust deed could last longer than 4 years.
The duration usually depends on how much monthly payments you could make.
Trust deeds are the most commonly used debt management schemes in Scotland.
Many people have been successful in paying off their unwanted debts.
It is important to be well informed about your debt solutions before you get into an agreement.
Read this guide carefully, it will help you understand how you could benefit from a trust deed agreement.
If you feel we have missed out on anything, feel free to contact us for more information.