Ask anyone you know if they have heard of a Scottish Trust Deed and I guarantee you most of they haven’t. Most people think Trust Deeds or a ‘Deed of Trust’ is to do with the property market, which it is to some degree, but the definition of a Scottish Trust Deed is actually a form of debt help for Scottish residents. Debt has become an increasing problem not only in Scotland, but in the rest of the United Kingdom and in fact the rest of the world. Thanks to the banks, the world economy is in a global meltdown. Whilst the greedy high flyers at the top are sitting back and laughing while the government pumps more money into yet another bailout, people are losing their homes and it’s inevitably the taxpayer who picks up the bill. Yes, debt is here to stay, at least for the next couple of decades I imagine and I’m sure our grand children will have to take some of the burden. Anyway, back to the topic…
So, tell me, what is a Scottish Trust Deed exactly? A Scottish Trust Deed is basically a formal arrangement between you and your creditors to repay what you can afford towards your debts over a set period of 36 months. You pay one lower, set amount for this period and then any remaining debt left at the end is legally written off by your creditors. If you were to take out a similar arrangement in England you would find it would come under an IVA (Individual Voluntary Arrangement) but a Trust Deed has more favourable criteria.
200 per month is not the set amount for an IVA There is a lot of misleading information in circulation regarding IVAs. Most people assume you pay 200 per month and then in 60 months you are debt free, but to be honest it all depends on your circumstances. The main factor is that you must be able to repay at least 25% of the total debt over the 60 month period, so if this works out at 200 for you, great! But it doesn’t for everyone.
The minimum period for a Trust Deed is 36 months (3 years), 2 years less than an IVA and you must owe no less than 10,000 a difference of 5,000 in comparison. On top of this you must be able to repay only 10% of the debt and afford 150 per month, a staggering difference. So if you are a Scottish resident who owes over 10,000, can afford 150 per month and is struggling with your debts your in luck, there is a solution!
Trust Deeds are not for everyone… So you have decided to look into this, but keep in mind, Scottish Trust Deeds are not for everyone. They are only meant for people who are struggling to repay their debts and cannot find a viable solution to their debt problems. You may have taken out too much debt, had a pay cut or lost your job to redundancy, all of which would be viable reasons to look into this Scottish Debt Solution. If you own your own home a Trust Deed would be the best option if you are in financial difficulty as it can prevent it from being repossessed by the banks.
Trust Deeds have an additional bonus… the interest and charges are frozen! Meaning your debt level will not increase like it probably is now and the majority of your monthly repayments go towards the banks profits and only a minute percentage of your debt is actually paid off each month.
Like any debt solution, there is a downside… and in this case it is your credit rating, which will be affected during the 3 years period and may take some time to recover thereafter, but if you are in severe dire straits with your finances it is highly likely that you won’t to obtain any further credit in the future and want to steer clear of debt for good! So it is most probable that you will not require the use of your credit rating. The next downside is your reputation, which isn’t a problem to all of us, but there will be some of us out there who are conscious of the fact they are obtaining help with their finances and wont want people to know about it, but I guess all that depends on you as a person.
For more information on how to write off debt in Scotland with a Trust Deed visit our website. Use our Trust Deed calculator to see if you qualify. Get on the road to debt freedom!