Advantages of Trust Deeds

If you are struggling to cope with your debt and you feel that you have no other option but to file for bankruptcy then you will be glad to know that there are other options available to you.  A trust deed is an agreement between a debtor (known as the trustor) and the creditor.  You may think that this is similar to a debt management plan or an IVA (Individual Voluntary Arrangement) but the difference is that a third party – the trustee, is involved.  The trustee is the company that will handle all the financial assets of the trustor and will arrange the deed of trust and makes sure that both parties meet their side of the agreement.

There are a number of benefits to the trust deed and the following are just and example:

• There is no need for the trustor to have to deal with the creditors.  The trustee takes care of dealing with the creditor on behalf of the trustor.  When it comes to making payments the trustor does not have to worry about dealing with the creditor as the trustee will also take care of this.
• Because the trust deed is a private arrangement between the trustor and the creditor, it can be changed if both parties are agreeable.  It is not as formal as an agreement like the IVA and if there is a need to increase or decrease the payments at any time then this can probably be done if both parties agree to it.  Any negotiations regarding payments or any other terms of the agreement can be done by the trustee.  This is probably one of the biggest benefits for both parties.
• Once the deeds of trust are made legal, there can be no more interest added to the debt by the creditor.  Once you have agreed a deed of trust with the creditor, the debt cannot be increased because of interest.
• If you take out a protected trust deed then there this prevents the creditor from making contact with you.  This means that you will not be put under any pressure to file for bankruptcy from your creditor.
• With deeds of trust, an arrangement is put in place for you to pay an agreed amount for three years.  Once you have paid the agreed amount each month for the thirty six months, all your debts will be written off.  You will not have to pay any remaining debt.
• One of the biggest benefits for many people is the fact that with trust deeds, you can still be a director of a company.  You can still stay in charge of your company if you have trust deeds unlike if you were to file for bankruptcy.