A Scottish Trust Deed is a voluntary arrangement that you can make with the people that you owe money to. You will agree to reimburse low monthly payments towards a plan for a period of 4 years. When the 4 years has finished, your remaining debt will be completely written off and you will become completely debt free.
A trust deed is legally binding and has to be set up by an experienced Insolvency Practitioner
Features of a trust deed
According to the Scottish trust deed, all of your debt will be written off after 48 months the interest and charges on your debts will stop, your creditors will not be able to get in touch with you at all directly. Debt collectors and bailiffs will not be allowed to visit your home according to the trust deed.
If you are in serious debt, you might resist seeing a way out. Possibly you don’t know if you can afford to pay back the money you owe. Maybe you are worried that you will have to sell your home or possibly your creditors are menacing court action. A trust deed is the only possible option in that situation.
When you sign a trust deed, you concur to make affordable monthly payments over a fixed period of up to four years to decrease your debts. At the end of the four-year period, any outstanding debts will be written off. In other words, you will have nil more to pay.
A trust deed is a legally compulsory arrangement and covers unsecured debts only, such as credit cards and private loans. It does not consequently apply to your mortgage or any hire purchase agreements. A trust deed must also be set up by a bankruptcy practitioner, who becomes the trustee and deal with the creditors on your behalf.
It’s significant to choose an insolvency practitioner that you can trust as you will have to give details of your assets and income, as well as your debts and creditors, to create an apparent picture of your finances. When you sign a trust deed, you agree to make reasonable monthly payments
Stay in your home
The trust deed will take into explanation the equity in your home – the value after any mortgage – but you do not typically have to sell the property. You can also usually keep a car as long as it isn’t especially valuable. The bankruptcy practitioner will then work out how much you can manage to pay each month and present the proposal to the creditors. As long as at least 75% of your creditors agree, the arrangement deed can be set up. The bankruptcy practitioner will usually allege a fee, and the money will be deducted from the journal payment.
The trust deed should then be ‘protected’, which means the creditors cannot follow you for the money or add any interest or charges to your obtainable debts. They are also not capable to take court action as long as you keep up with the payments.