Escape Unmanageable Debts with a Trust Deed

If debt is making your life miserable you will likely be looking for a way out of this. If you are a resident in Scotland then one solution will be a trust deed. This is a formal proposal that is made to your creditor with the aim of ending your debt problems. You don’t make this proposal yourself, but instead a professional does it on your behalf. With this type of agreement you should pay back a lot less than what you owe. Once it is agreed it becomes legally binding. The trust deed is very similar to the individual voluntary arrangement (IVA) that exists elsewhere in the UK.

What to Expect with a Trust Deed

The first part of arranging a trust deed is to look closely at your finance. You will do this with the professional who has been tasked with handling the agreement. You need to decide on a realistic amount of money that you will be able to pay back over an agreed period of time. There is no point in agreeing to anything that you won’t be able to manage, because this will only make things a lot worse. Once there is a clear idea of how much you can pay it will then be up to your representative to make a proposal to your creditors on your behalf.

It is important to realise that your creditor does not have to say yes to your proposal. In fact they are only like to do so if they feel it is their best option for getting money back. It will be up to your representative to convince them that this is the best you have to offer.

Trust Deed Pros

There are undoubtedly some good benefits of choosing this type of agreement including:

• You will have a solution to end your debt problems. This should mean an end to worry and stress.
• You will only usually have to pay back a portion of what you actually owe your creditors.
• There should be no more threatening letters from your creditors. So long as you stick to the agreement they will not be allowed to take any further legal action.
• You will have a date after which you will be free from debt

Trust Deed Cons

There are a number of cons associated with this type of agreement including:

• This is likely going to damage your credit rating in the future. You may find it hard to borrow money. This is a real limitation as most of us depend on being able to do this from time to time.
• Your name will appear in the Edinburgh Gazette to say that you have needed to avail of a trust deed
• There are also fees associated with making this type of arrangement

Choosing a trust deed can be a great option if you are up to your neck in debt. There are other options though, so you will want to consider these as well.