Many people throughout the UK are finding that they have difficulty managing their finances, and many have run up heavy levels of personal debt, and may also be in arrears on rent and utility bills. In Scotland the Trust Deed system provides an alternative to sequestration. This Trust Deeds Scotland article provides a brief explanation of how people may be able to become debt free in a reasonable length of time.
Many people throughout all parts of the UK are suffering from financial difficulties, and many are struggling with indebtedness. It can be difficult or even impossible to balance the necessities required for daily living – food, rent, clothes, gas and electricity – with the interest and principal repayments required on loans and credit card bills. The high interest rates charged by some lenders can also make it seem that the debts are never going to get any smaller.
In Scotland the Protected Trust Deed system has been designed to provide an alternative to sequestration (sequestration is the Scottish law equivalent of bankruptcy). In a sequestration all of a debtors assets, including house, car etc may end up being sold to repay debts, but under a trust deed the debtor and his trustee retain a much greater control over the process.
There is also no publicity, and no need for the courts to become involved – although the deed is legally binding, it is also private. Creditors must freeze interest and penalty charges once a deed becomes protected, and they cannot petition for the debtor to become sequestered provide he continues to comply with the terms of the deed.
The first step in agreeing to, and entering into, a trust debt, is to obtain debt advice. Charities such as the local Citizens Advice Bureau, and Payplan have trained advisers, who can give free and confidential advice. Advice is also available from various debt management companies, who normally charge a fee.
If the credit counseling determines that a trust deed is a viable alternative, then a deed may be drawn up. This legal document transfers the debtor’s estate (i. E., his assets) to a trustee. This may include the debtor’s house if he is an owner-occupier, but solutions such as refinancing and third party buyouts are commonly explored to avoid selling the property.
There is also a period – usually about three years – in which the debtor’s disposable income is used to repay creditors. This arrangement should always leave enough income for reasonable living expenses. Provided the debtor complies with the deed, then all remaining debts will be canceled or written off.
Do you live in Scotland and feel you may benefit from entering a trust deed agreement? Visit Payplan for more information
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- What are the affects a Trust Deed in Scotland has on your property?
- Scottish Trust Deed – The Scottish Debt Solution
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Tags: Bankruptcy, Debt, Debt Management, iva, trust deed