What is a Trust Deed? A Trust Deed is a legally binding agreement between an individual who is unable to pay his or her creditors and a licensed Insolvency Practitioner (the Trustee). The Trustee will put together a form of proposals to the Creditors for approval and administer the Trust Deed. It allows you to pay as much of your debts as your assets and/or your monthly surplus income will allow, usually over a three-year period. A Trust Deed may be registered as protected, provided certain criteria are met. Once protected, all your creditors are bound by the agreement and must not contact you. While the terms of a Debt Management Plan are informal, and creditors may increase their demands on the debtor at any time, interest and charges will be frozen for the duration of a protected Trust Deed. The process of a Trust Deed is not as formal as sequestration (bankruptcy). Although it is a legally binding agreement, there is no court involvement in setting up the process. Once signed, you are committed to the terms of your agreement (usually three years, but this can vary). Could a Trust Deed be right for me? The criteria for entering into a Trust Deed are straightforward, and we will be happy to talk them through with you. Only individuals in Scotland can enter into a Trust Deed. You could also qualify if Scotland has been your main country of residence at any time prior to the date the Trust Deed is signed. There is no set amount of debt or contribution required for a Trust Deed. Each Trust Deed proposal is treated individually, based on your own unique circumstances. Only unsecured debts can be included in a Trust Deed (these are debts not secured against property or other assets, e.g. mortgages). If you have any questions about whether a Trust Deed may be suitable for you, please don’t hesitate to call us. What makes a Trust Deed preferable to other debt solutions? For those with a large amount of unsecured debt, for whom a Debt Management Plan may not offer a solution within a fixed timescale or bankruptcy will be too disruptive, a Trust Deed offers financial freedom within the foreseeable future. All interest and charges will be frozen. Pressure from creditors will be eased, as the Trustee deals with all correspondence and queries. A Trust Deed is usually more flexible and less costly to administer than sequestration. It also allows the individual to hold certain public offices, which may not be the case with sequestration. It may be possible for companies to continue trading and individuals to retain their directorships. Trust Deeds are not published in local newspapers. After you successfully complete the term of your Trust Deed, you are free from all debt included in it. What other points about Trust Deeds should I be aware of? A Trust Deed will not be the ideal solution for every debtor and you should consider all implications before you enter into an agreement, including those listed below. Once again, please call us any time for free, impartial and confidential advice. All assets and liabilities have to be declared. You will be required to release any equity in your property and assets of large value will be realised. Entering a Trust Deed will affect your credit rating. You need to stick carefully to a budget for the duration of your Trust Deed and your income and expenditure will be reviewed regularly in this time.

Voluntary Trust Deed

A trust deed is a voluntary agreement between a debtor and their creditors (the people they owe money to) to repay part of what they owe. A trust deed transfers the debtors rights to the things that they own to a trustee who will sell them to pay creditors part of what is owed to them. A trust deed will normally include a contribution from income for a specified period, this is usually 36 months but can vary.

The trustee must be a qualified insolvency practitioner. Insolvency practitioners are regulated by law and must be members of an approved governing body. Independent Insolvency Practitioners fees are at their own and their licensing authority’s discretion.

An ordinary trust deed is not binding on creditors unless they agree to its terms.

Protected Trust Deed

A protected trust deed is a special kind of trust deed that is binding on all creditors. Provided the debtor complies with the terms of their protected trust deed, the creditors can take no further action to pursue the debt or to make the debtor bankrupt.

A protected trust deed prevents the debtor from applying for their own bankruptcy or for a debt payment programme under the Debt Arrangement Scheme.

If a debtor aquires any new debts after they sign the trust deed, they will not be protected from action by ther new creditors.

What are the consequences of signing a trust deed?

Signing a trust deed is a serious step – debtors must be sure that they understand what they are signing.

Before a debtor signs, a trustee must give them advice about the consequences and must tell them about the alternatives to a trust deed. The alternatives include a debt management plan and a Debt Payment Plan under the Debt Arrangement Scheme. The trustee must also give the debtor a copy of the Scottish Government’s Debt Advice and Information Package.

Like bankruptcy, a protected trust deed is likely to affect a debtor’s credit rating and may prevent them from doing some jobs. If the trust deed fails to become protected the creditors may be able to make the debtor bankrupt.

The trustee will charge for the work they do and the debtor can choose who their trustee will be. The trustee must give the debtor an indication of what they will charge before the trust deed is signed.

Freeze interest and charges, stop hassle from your creditors and be debt free in 36 months with a Trust Deed in Scotland…

What is a Trust Deed?
A Trust Deed is a formal agreement between you and your creditors to pay back what you can afford towards your debts. They are an extremely powerful and legal tool to help you back on the road to financial stability. A Trust Deed is designed for people who have taken out too much debt and are struggling to meet their monthly repayments. The usually repayment period for a Trust Deed is 36 months (3 years). You will be required to pay a set amount per month for the 36 month period, after that your creditors are legally obliged to write off any remaining debts.

Are interest and charges frozen?
Yes. Once you have entered into a Trust Deed all interest and charges are frozen and no legal action will be taken against you.

How much does it cost to setup?
Nothing. Trust Deeds are designed to get you out of debt, not to increase it! Any fees incurred by the Trust Deed Company are charged directly to your creditors.

How long does it take to set up?
Most Trust Deeds usually take between 2-4 weeks to be drafted. They are then passed to your creditors for approval which can take up to 2 weeks. Once the Trust Deed is setup your creditors are LEGALLY NOT ALLOWED to contact you by any means and you will no longer have to deal with them anymore. You simply make the arranged payment to your Trust Deed Company for the set period (usually 36 months), once this has expired any remaining debts are written off and you walk away debt free.

How do I apply?
 If you do qualify, based on the information you have provided, we will recommend the most appropriate company that matches your criteria to help you. That company will then contact you and go through your situation and explain everything in detail.

Note: All the companies we recommend are licensed and registered with the Office of Fair Trading so you can rest assured you case will be dealt with professionally.