Is a trust deed worth it?

Trust deeds can be a valuable aid to financial stability, but they are not right for everybody. They are best suited to people who have a regular income and can commit to regular payments. You can owe any amount to set up a trust deed but the typical minimum is about £7,000 or £8,000.

How long does a trust deed last in Scotland?

The Trust Deed is a debt solution that’s only available to residents of Scotland and typically lasts for 48 months although there are some factors that can affect the length of time that a person would be in a Trust Deed.

Who qualifies for a trust deed?

You must not be able to pay your debts in full in under 48 months. Your income can’t be solely from benefits, and any contribution amount can’t derive from benefits, the non-benefit income must equal or exceed the payment amount. You can’t have been bankrupt in the last 5 years.

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Can I pay off a trust deed?

Cancelling a Trust Deed A Trust Deed is a legally binding agreement, so cannot be cancelled at will. If you are unable to make payments which your creditors find acceptable, your Trust Deed may fail.

Can you be refused a trust deed?

The route you choose to take will depend on the reasons why your trust deed was rejected. When it comes to rejection it is often because creditors feel they would stand to receive more money if you were sequestrated (made bankrupt) than by agreeing to the payments offered in the trust deed.

How does a trust deed work in Scotland?

A trust deed is a voluntary agreement between you and the people you owe money to (also called your creditors). You agree to pay a regular amount of money towards your debts and at the end of a fixed time the rest of your debts will be written off.

Will a trust deed affect my partner?

Entering into Trust Deeds will not affect your partner or spouse unless you have joint debt together. When you sign a credit agreement, because you have done so in your own name; your spouse or partner is not responsible to pay your debts.

Can you get car finance while in a trust deed?

Therefore, it’s more difficult to get car finance during a Trust Deed, but not impossible. During your Trust Deed term, you will need to seek permission from your Trustee to obtain any form of credit. Not informing your Trustee breaches the terms of your agreement and could lead to your Trust Deed failing.

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Can you go to jail for debt in Scotland?

No, you cannot be sent to jail for having debts. Ever since the Debtors ( Scotland ) Act of 1880, people in Scotland cannot be imprisoned for not paying their debts.

What Does a Trust Deed include?

Property Description Like a traditional deed, a deed of trust includes a detailed description of the property being bought. It very specifically describes what the trustor has the rights to, assuming they follow all the guidelines in the trust in terms of repayment of the loan.

How much does it cost to set up a trust in Scotland?

How much does it cost to set up a trust? Instructing a solicitor to set up a trust for you can be expensive – typically around £1,000 or more. But using a solicitor helps you avoid costly mistakes further down the line – for example if the wording of your trust is ambiguous or misleading.

How long after a trust deed can I get credit?

Once you have met all your obligations and successfully completed your Trust Deed, your creditors should inform the credit reference agencies that your debt with them has been ‘satisfied’ or ‘settled’. It will be more difficult to obtain credit in the two years after your Trust Deed ends, however, it’s not impossible.

What happens after a trust deed ends?

At the end of your Trust Deed term, any unsecured debt that you weren’t able to repay during your Trust Deed will be written off. When you are discharged from a Protected Trust Deed, you will be discharged from any outstanding debts from the creditors that you had included at the date you registered your Trust Deed.

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How long do you pay a trust deed for?

A trust deed remains on your credit file for six years, a timescale that exceeds the term of most trust deeds which are generally completed in three or four years.

Has anyone got a mortgage after a trust deed?

Although it’s not impossible to get a mortgage after an IVA or Trust Deed, your chances may be limited for some time. It’s a good idea to approach a ‘whole-of-market’ mortgage broker or financial adviser, and to plan ahead in terms of saving for a deposit.

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