A Scottish trust deed is a formal and voluntary agreement between you and the creditor. In this process, you agree to pay some low monthly payments towards your debts for a period of about 4 years and at the end of it, the rest of your debts are written off. Scottish Trust Deeds in Scotland is only available to residents of Scotland and provides debt help to individuals who are unable to repay their debts over a period of time.
Moreover, all your assets and belongings are passed to your trustee, who takes care of your financial affairs. He makes sure to pay your debts as much as possible by selling off the assets and properties. If the majority of your creditors are happy with the terms of the trust deed, your trust deed can become ‘protected’. Protected trust deed ensures that your creditors cannot take any steps to recover the money owed to them.
Who qualifies for Trust Deeds in Scotland?
There are certain criteria that you need to meet in order for you to qualify for Scottish Trust Deeds in Scotland. You can apply for the trust deed if you have a minimum debt of about £5000, you must owe money to two or more people or should have 2 lines of credit from a single lender, you must be a resident of Scotland, and you must be able to put at least £100 every month into your arrangement. Moreover, you need to have certain assets and properties such as savings, a car, a house or some investments, by selling which you can repay your amount to the creditors.
What are the advantages of protected trust deeds?
Protected trust deeds come with certain advantages as follows.
- Here the creditor cannot contact you and instead have to deal with your trustee. Therefore, you don’t have to face your creditors.
- Unlike bankruptcy wherein, you have to show that you are unable to pay your bills as they fall due, herein this situation can be avoided. You are not required to show your incapability to pay your bills on time.
- Here you can apply for no enforcement action. This is called ‘moratorium’, wherein your creditors cannot take any actions such as arresting your bank account. Moratorium only lasts for 6 months.
- You are legally not restricted from borrowing money in terms of mortgage or credit cards.
- Most of your debts are wiped out usually after about 4 years and you will not have to pay them back.
Though the Scottish Trust Deed in Scotland looks like an ideal choice, it is always good to seek advice from the expert if it suits your situation and circumstances.