What is a Scottish Trust Deed?
A Scottish Trust Deed is a formal and legally binding arrangement with the people you owe money to (your creditors). You will agree a fixed monthly amount for a period of 4 years. At the end of the 4 years, your creditors will agree to write off any remaining debt. Leaving you completely debt free!
Once your trust deed has been approved by your creditors, your creditors can no longer chase you for outstanding debts. They will not be allowed to contact you in any way, and they can’t sell your debts, appoint bailiffs or take court action. Even though a trust deed is a formal arrangement, it can be submitted electronically and set up quickly, easily and confidentially.
Trust Deeds Explained
Check out our quick guide for useful tips before you apply for your trust deed:
WHAT ARE THE BENEFITS OF A TRUST DEED?
- One single and affordable monthly payment
Rather than having a number of monthly repayments to make, you will pay one single affordable payment to your trust deed company. This will be set at an amount which you can afford to repay, so you can finally ensure all of your creditors are being paid at the same time.
- Legal protection from the people you owe money to
When you owe money to companies, they will try to reclaim the money in various ways if they are not paid in time. A trust deed will stop all phone calls, text messages, debt collectors, court action and bailiffs straight away. Leaving you to move on with your life without the fear of people chasing you for money that you may not necessarily have.
- No more interest and charges
When your trust deed starts, your creditors will not add on any interest or charges.
- Debt written off
Trust deeds usually last for 4 years, at the end of the 4 years any outstanding debts will be written off. This will leave you completely debt free and ready to move on.
WHAT ARE THE RISKS OF A TRUST DEED?
- Any equity may be released
If you own a property and the value of the property is more than the balance owed on the mortgage, then you may be asked to release this money to pay towards your debt. If you are a tenant, this is not relevant.
- Your credit rating will be affected
If you have a perfect credit score, prepare for that to change. A Scottish trust deed will negatively impact your credit rating. When you are in your arrangement, you will also not be allowed to take out any more debts such as credit cards, loans or store cards. At the end of the arrangement, you are free to continue as before.
- Fixed monthly payments
You will have to make fixed monthly payments for the full term of the arrangement. There are no options for payment breaks, reducing the payment down or late payments.
WHO WILL PROVIDE CUSTOMER SERVICES FOR MY TRUST DEED?
Your trust deed will be looked after by the company that you choose. Here at Scottish Trust Deed, we quickly check your personal situation (who you owe money to, how much and your income) and we will put you in touch with a company which is most suited to these circumstances.
We will make sure the company we pick has the highest reviews, has no set up fees, will handle your documents electronically (no home or office visits) and can deal with your application quickly and efficiently.
WILL A TRUST DEED STOP CALLS, LETTERS, TEXTS, BAILIFFS AND DEBT COLLECTORS?
When you enter a trust deed, all contact from creditors will stop. This includes phone calls, text messages, voicemails, emails, home visits and referrals to debt collection agencies and bailiffs.
WILL I BE ABLE TO KEEP MY HOUSE IF I ENTER A TRUST DEED?
If you are a tenant then your home will not be affected.
If you own your property and the property has equity, you may be asked to release this equity to pay towards your debt.
If you live with your parents, their home will not be affected.
WILL I BE ABLE TO KEEP MY CAR IF I ENTER A TRUST DEED?
Most of the time your car will not be affected by your trust deed. In certain circumstances, such as you have a particular luxurious car or if you are paying a high amount on car finance, you may be asked to change your vehicle to something more in line with your financial situation.
HOW WILL A TRUST DEED AFFECT MY CREDIT RATING?
When you take out a trust deed, your credit rating will be impacted negatively.
When you are in your trust deed, you will not be allowed to take out any more credit until your arrangement has finished (usually 4 years).