A Scottish Trust Deed is defined as a legal debt solution usually expressed in the form of a contract. The contract is between a debtor and a creditor and this form of contract is usually supervised and managed by an Insolvency Practitioner who is licensed. Scottish Trust Deeds will help you reach a compromise with your creditor and get you on the path to debt freedom.
Who can take out a Scottish Trust Deed?
Scottish Trust Deeds are only available for insolvent people living in Scotland who are experiencing problems with their creditors. It falls under the Bankruptcy Scotland Act which was formed in 1985 and later amended in 2008. Many people find this helpful especially property owners who want to avoid the risk of losing their property when they become bankrupt. A debtor can be an individual or a partnership and they are protected from legal debt enforcements included in the trust deed.
What will change?
It is important to know that Scottish Trust Deeds will not change any decision that was taken before the deed; for example bank statements. The trustee can however negotiate for things like the lifting of arrestment. You may not loose your property when you enter into a trust deed. There are certain things that must exist for you to be able to sign a deed. You must be in control of your spending and this means you do not qualify to get credit; for example you have to buy things for cash and be able to live within your means.
What are the advantages?
There are many advantages of entering into this type of contract. There is no interest and zero charges on your payments. The monthly instalments that you are going to pay are basically what you can afford. There will not be any direct fees that you pay but some service providers may need you to pay some charges upfront. You will not be bothered by creditors throughout the term of the contract. It also means you are protected from any legal action and you will be in a position to manage and control your financial problems.
Is my home at risk from repossession in a Trust Deed?
Although there are a lot of advantages it is important to know that in order for the trust deed to be accepted your property may remain at risk if the creditor does not include them. Your financial and credit history will be affected negatively; getting credit becomes more expensive in the future. You will also not be able to use your credit cards. It also means you will not be able to borrow money during that period until you have completed the arrangement. If you fail to meet your obligations and the trust deed fails then you may be sequestrated.
What is the criteria for a PTD?
In order to apply for a Scottish Trust Deed you need to approach any solvency practitioner in Scotland. The only professionals who can regulate theses deeds are Insolvency Practitioners and they must be licensed. You can contact their professional body if you have any problems with them. There are certain obligations however of entering into this arrangement. When you agree to sign it means you have entered into a legally binding contract and you must cooperate with the trustee throughout the contract.
All payments must be done on time and you are not supposed to enter into other credit agreements. Any changes in terms of your financial circumstances must also be communicated to the trustee; things like unemployment for example may require the trustee to review and assess what is reasonable in terms of your monthly contribution.
Who is the best Scottish Trust Deed Company?
It is a good idea to shop around for a reputable insolvency practitioner because they are the only specialists who can arrange trust deeds. You can search on the internet and do background checks just to confirm how reputable they are. You may also find out from family and friends, they may refer you to practitioners they have dealt with in the past. In most cases insolvency practitioners do not charge fees for setting up deeds, they usually negotiate with creditors to have the fees taken from the money paid into the trust deed.
How long does it take to setup a Trust Deed in Scotland?
Setting up this arrangement normally takes between two and three months. It is important to note that your credit rating can be greatly affected for a period of about three years. It means you can not get credit and may fail to get it even in the fourth year as you will be still building your credit rating. At the end of the day it is important to note that a trust deed costs less to setup than a bankruptcy, you will also be free from interest charges and you can even remain a company director or hold a public office. In addition to that all the debt that remains after three years will be cancelled.