What paperwork will I need to start a Trust Deed?
A Trust Deed (TD) is a formal agreement to settle debts that you are unable to pay in full if you live in Scotland. Involves you paying what you can afford towards your debts normally over three years.
In order for your creditors to agree to the Arrangement you must prove to them that you are making the best offer of payment that you can. You will have to submit a financial statement of affairs which shows your debts, your assets, your monthly income and expenditure.
You will also have to prove the main financial facts that you give in your statement of affairs by providing various items of paperwork.
The key documents required to support your Trust Deed application
There are some key documents that you will almost certainly have to provide in order to propose a Trust Deed to your creditors.
You will have to provide a photo identification such as a copy of your passport or photo driving licence. This is to prove who you say you are and to help prevent money laundering.
Proof of your debts
You will need to provide the latest statement, or collection letter that you have for each of your credit card or catalogue debts and the original loan agreement or proof of the current outstanding balance for any loans.
Proof of your income
To prove your income you will have to provide your last three months wages slips. If you are paid weekly, you will need to provide each slip you received in the last three months (twelve in total). If you also receive benefits or other types of payments, you will normally need to provide a benefits statement as well.
BMD Tip: If you are self employed you may not have any wage slips. However you will need to provide copies of your last year’s accounts or tax return and a trading projection for the next 12 months.
To prove your living expenses in general you will need to provide your bank statements for the last three months. However you will also have to prove some of the larger expenditures such as rent or mortgage payments and a car HP agreement individually.
Proof of your monthly mortgage or rental payments
If you rent your property you will need to provide a copy of your rent agreement. If you own your home you will need to provide your latest mortgage statement and a recent written valuation of your property.
Do you want help to start a Trust Deed? Give us a call on 0800 077 6180 or complete the form below to speak to one of our experts
How to get a free home valuation if you are a homeowner
Generally speaking you will be able to provide most of the paperwork required by your insolvency practitioner relatively easily. However if you are a home owner, you may not have an up to date written valuation available.
You do not have to pay anyone to provide a formal valuation. Normally a valuation form a local estate agent will be more than acceptable.
When you speak to the estate agent’s office you should not mention that you need the valuation for the purposes of doing a Trust Deed. Instead simply tell them that you want to put your house on the market and would like them to come round to do an appraisal.
Once the appraisal has been done and you have received the valuation in writing simply tell the estate agent that you have changed your mind and you no longer want to sell.
Will my partner or spouse need to provide any paperwork?
If you are living together with a partner or spouse and you combine your incomes and living expenditures, your partner will normally also have to prove their income by providing wage slips or benefits statements even if they are not involved with the Trust Deed.
The reason for this is that you have to prove that they are paying their fair share of the household living expenses.
If they are earning a similar amount to you, you cannot claim to be paying over 50 percent of the joint living expenses and so artificially reduce the amount you can afford to pay into your Trust Deed each month.
Even though your partner may have to provide proof of their income they have no reason to be concerned.
The fact that they have provided this paperwork does not involve them in the Trust Deed in any way and certainly does not mean that they will somehow become liable for the repayment of your debt.
Will I need to provide additional paperwork during my annual Trust Deed review?
Once your Trust Deed has been accepted (known as becoming protected), the monthly payments you make into it will normally last for three years.
At the end of each year that your Trust Deed runs a review of your financial situation will take place. This is to establish whether your monthly payment should remain the same or whether it should be increased or decreased if your financial situation has changed.
You will have to re-submit an up to date income and expenditure form to your Trustee to verify that your income and expenditures have not changed.
At the same time you will probably be asked to provide your last three bank statements and wage slips to provide proof of the updated figures.
It is unusual to be asked for more than this. However your Trustee can ask you to provide all of your bank statements and wage slips for the entire year if they feel that you may not have been honest about your earnings.
Is there any way around providing the paperwork required for a Trust Deed?
The answer to this question is no. If the insolvency practitioner is not satisfied with the level of information that you have provided, they will simply not submit your Trust deed proposal to your creditors.
At first glance it may seem a lot of hassle to get together all the paperwork you need for your Trust Deed.
However you need to remember that once the agreement is in place it could mean that your creditors agree to writing off a considerable amount of your unsecured debt. Normally this is incentive enough to spend a few hours collating the paperwork required.
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