Trust Deeds (in Scotland only)

A trust deed in Scotland is a formal arrangement with your creditors, used in Scotland where a debtor grants a deed in favour of the trustee which transfers their assets tothe trustee for the benefit of creditors. A trust deed is very common for those that have been refused loans to clear debt.

Provided certain conditions are met, a Trust Deed in Scotalnd may be registered as "protected", thereby preventing creditors from petitioning for the debtor's sequestration or taking any other steps to recover debts due to them. Financial and personal circumstances vary, so the consequences of signing a Trust Deed in Scotland will be different for each individual or partnership.

The advantages of a trust deed in Scotland 

The advantages of trust deed in Scotalndare that it takes the pressure off as all correspondence and the Trustee deals with queries from creditors. It puts the debtor rather than creditors in control of the debtor's financial situation and reduces the costs - a trust Deed in Scotalnd is usually more flexible and less costly to administer than sequestration and allows the debtor the right to fulfil certain public offices - which would not be the case with sequestration.

The disadvantages of a trust deed in Scotland are that existing arrestments and other diligence continue to be effective, home owners may be forced to sell if creditors cannot be paid in full from other sources and debtors cannot trade on their own account or hold directorships of a limited company.

Other debt solutions

If you do not live in Scotland there are otherdebt solutions for dealing with debts. After a chat with one of the counsellors they will be able to identity the right debt solution for you.

IVA  -Individual Voluntary Arrangement

An IVA is often the fairest way forward for both you and your creditors if you owe more than £15,000 and are struggling to meet your repayments. An IVA is a legally binding agreement that protects you against any further action from people who are chasing you for money. Once in an IVA you could realistically be debt-free in sixty months.

Debt Management Plan

When considering debt management, you should also be aware that unlike an IVA (Individual Voluntary Arrangement), it is not a legally binding agreement. There may be other debt solutions available that are more suitable for your debt, so call us first to find out.

Bankruptcy

Bankruptcy is an option that often has to be considered when an individual cannot pay their debts as they fall due. A first time bankrupt with debts will generally receive their discharge one year after the date of the bankruptcy order (there is the possibility that in some cases the bankruptcy discharge period will be less than one year).

Remortgage

This is when the terms of the original mortgage are renegotiated, and usually means that the borrower increases the amount that they are borrowing, which is often possible due to a rise in the value of the property. A remortgage may allow the homeowner to repay other debts such as personal loans or credit cards, or it may be a way of paying for home improvements such as a conservatory a loft conversion.

If you are unsure which step to take to solve your debt problems, please feel free to call one of our advisors to ask our opinion. This is a totally free and confidential service on 0800 074 6918.