Trust Deeds

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If you live in Scotland our team of expert debt advisors is here to help you to get back on track with your debt. Here you can find out if a Trust Deeds is the best solution for you. Take our 1 minute debt test below.

Trust Deeds in Scotland

If you live in Scotland, and it has become difficult or impossible for you to pay off your unsecured debt on time, a Trust Deed may be able to resolve your issue. A Trust Deed is a legal agreement between a borrower who can't pay off their debts, and a licensed Trustee.

How it Works

The Trustee will set up a proposal and send it to the creditors for their approval. If a Trust Deed agreement can be reached, it allows the borrower to reduce their monthly debt spending to an amount that they can afford. The program typically lasts for three years.

If specific criteria are met, the Trust Deed can be officially registered as protected. This means your creditors can not change their minds, and can only contact your Trustee, not you. This is the primary difference between a Trust Deed and a Debt Management Plan, which is informal.

While a Trust Deed is legally binding, it does not require the intervention of the courts, unlike bankruptcy. Just like your creditors, you are legally bound by the Deed until its terms are met.

Who Qualifies?

- Only an individual can enter into a Trustee
- You must live in Scotland
- Only unsecured debt qualifies, meaning there is no collateral for the debt

There are no debt or income requirements in order to qualify for a Trust Deed. Each Deed is treated separately, based on the individual's income and debt. Participation in a Trust Deed is voluntary, but legally binding once signed by both parties.

When a Trust Deed is the Best Choice

Individuals who have a great deal of unsecured debt are most likely to benefit. If a Debt Management Plan does not resolve the issue in a timely enough manner, and Bankruptcy is unnecessary, a Trust Deed is usually the best option. Several benefits are provided by the agreement:

- Creditors will no longer contact you directly
- The interest rate and monthly charges are frozen
- Those involved in business may still continue to trade, or keep a position as a director
- It is much more accommodating than bankruptcy, protecting your employment future
- A Trust Deed is not used to shun you in the newspaper
- All debt included in the Trust Deed is forgiven after the terms of the Deed are met

It is important to realize that, like bankruptcy, you will lose some of your assets, your credit rating will be harmed, and your financial situation will be carefully reviewed during the term of the Deed.