Protected trust deeds are only available to residents of Scotland that are in financial difficulty with debts over £6,000 and meet specific criteria.
Provided you have maintained all of your trust deed payments, you will be free of all unsecured debts within 4 years.
Trust deeds are voluntary agreements between you and your creditors (the people you owe money to). You agree to repay part of what you owe them. A trust deed will normally include a contribution out of your income for a specified period; this is usually 4 years but can vary.
Each case is individually assessed, much in the same way as with an IVA in England or Wales. As such, you may qualify with £6,000 or more debt from 2 or more creditors.
A trust deed will:
- Consolidate your unsecured debt into one monthly payment.
- Have a fixed term, usually 4 years.
- Write off all your remaining unsecured debts that were included in the trust deed, at the end of the term.
- Stop creditors from calling and sending letters to you.
- Prevent you from being made bankrupt / sequestration.
- Allow you to continue to run any limited company that you may be running.
- Reduce your monthly outgoings in line with your income and expenditure.
Yes, by entering into a trust deed, you will no longer be repaying debts at the originally agreed amount, this means your credit rating will be affected for six years.
A record of the trust will be held on your credit file for up to six years following completion.
Are you finding it difficult to meet your monthly payments? A debt management plan might help get your finances back on track.
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