A Trust Deed is one of the debt management solutions available if you are living in Scotland. It is a formal agreement with your unsecured creditors to settle your debt over a fixed period of normally 4 years (although this period could be extended in certain circumstances).
If you are struggling to pay the debt that you owe, a Trust Deed allows you to reduce all of the payments to your unsecured creditors and combine them into a single affordable amount. At the end of the agreement your creditors write off any debt that is still outstanding leaving you debt free.
Once it is protected the Trust Deed is a formal legally binding agreement where your creditors are not allowed to add further interest or charges to your debts. They are also prevented from taking further action against you such as wage arrestment, charging orders against your property or a petition for your bankruptcy.
There is no minimum level of debt required before you can start a Trust Deed however generally speaking you will need to have unsecured debts of at least £5,000. Anything less than this and you are probably better off considering a Debt Arrangement Scheme or Sequestration. You should also be able to pay at least £100 per month towards your debt.
Government advice about Debt Solutions in Scotland
As well as the information found on this website the Accountant in Bankruptcy (the Scottish Government’s Insolvency Service) has also produced two guides to personal debt solutions which you may also find useful: Debtor’s Guide and Debt and the Consequences.
The Money Advice Service (MAS) are an independent service set up by the Government to provide people with free advice about all aspects of personal finances. For help from MAS if you are struggling with debt please follow this link: MAS – Help if you are struggling with debt.
It is also recommended that you read this one page document produced by MAS entitled “Dealing with debt – 5 things you should know”.
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