If you live in Scotland, and have problems making the monthly repayments on loans and credit card bills, then you may be interested in learning how protected Trust Deeds Scotland might help you set up an affordable monthly payment. Typically this deed – which is a formal and legal alternative to sequestration – will last for three years, and at the end of that time any outstanding debts will be canceled or written off.
Nowadays many people have difficulty with their finances, both in meeting ordinary expenses such as weekly shopping bills and utility bills, and in paying off loans and credit card bills. Often interest charges are so high that it seems that personal debts will never be paid off.
In Scottish law the protected trust deed has been created to provide a way for people to become debt free, while avoiding the drastic effects of sequestration (or bankruptcy). One advantage that the protected deed has over sequestration, is that the debtor has more control over what happens to his assets, and is therefore much less likely to be required to sell his home.
Sequestration also has a significant cost in terms of social stigma, and future difficulties in obtaining credit. Entering into a protected trust deed demonstrates a willingness to pay as much as you can afford, while providing protection from any petitions for sequestration from the creditors.
Before entering into a debt solution it is necessary to have a proper financial assessment. This can be done through commercial debt management companies – they may charge a fee – or through charities such as Payplan and Citizens Advice.
If the debt counselor determines that the trust deed solution is appropriate, then the debtor transfers his estate to the trustee for the benefit of the creditors. If appropriate, equity in the home may be released through refinancing, or through a third party buyout.
There will probably also be a monthly budget drawn up for the debtor, and for a defined period (often three years) the debtor’s disposable income will be distributed to the creditors. The debtor should always be left with enough money for necessary living expenses, and to pay priority debts, such as rent and gas/electricity arrears. As part of the process the creditors must vote on the debt solution proposed by the trustee. If the plan is acceptable, and if the debtor complies with it properly, then any remaining debt will be written off at the end of the three years.
Do you want to find out more about a trust deed agreement? Visit Payplan for more information
