A Guide To Scottish Trust Deeds


Scottish trust deeds are bankruptcy option for individuals in Scotland and are a less extreme option for those wanting to avoid going bankrupt.

The poor economic climate has put more individuals into personal debt with studies showing some people owe more cash than they make in a year.

Getting help with your debt is important as the current ruinous economic climate is not sustainable and is most likely to get worse as time goes on.

A protected trust deed is just one of the options available for Scots and it’s a good choice for avoiding bankruptcy.

Does the amount I owe matter? The internet has so much info on the legal terms of trust deeds and some say that you have to owe a certain amount before being eligible for a trust deed. Trust deed terms vary from one person to another but most have the same condition: that you owe at least 2 lenders. What personal debts can I add to my trust deed?

Scottish trust deeds only include unsecured debts, like store cards, credit cards, overdrafts and loans.

Loans taken out secured on assets such as a house are secured personal debt and can not be added to your protected trust deed.

How much are my trust deed payments?

Your monthly payments depend on a number of factors like your creditors, the amount of money you currently owe and your income.

After looking at your income and outgoings your trustee will decide on your disposable income, which will go towards paying your trust deed each month.

This figure will allow you to make a payment to your trust deed but still be able to pay household bills, and your mortgage etc.

You will need to have around ⤠150 disposable income at the end of the month to make a trust deed possible.

When will my trust deed finish?

Most trust deeds are set up over 3 years but in rare cases this may be longer. For example, if you were to get a windfall, possibly win the lottery, you may be able to repay your debts earlier.

Is my trust deed protected and when from?

Your creditors will get a copy of the proposal when your trustee is satisfied and will also be featured in the Edinburgh Gazette.

Your lenders will 5 weeks to agree to the new trust deed plan and if at least 67 % agree then your trust deed will become protected regardless of the other 33 % objecting.

From start to finish the trust deed setup can take up to 8 weeks.

What happens when the trust deed is finished?

After 3 years of paying your monthly installments on time and in full, your remaining personal debt will be wiped clean.

After all that individuals are generally very wary about obtaining more credit, but as a Scottish trust deed will have hampered your credit score, it’s important to start rebuilding your credit history.

What do I do next to start a trust deed?

Contact a Bankruptcy Practitioner (IP) to act as your trustee.

They will look at your current situation and cash matters and asses whether a trust deed is the best option.

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