A Scottish trust deed, also known as a protected trust deed, is one of the debt solutions available to people struggling with unmanageable debt. Trust deeds are a way to make yourself debt free in just three years and relieve yourself of the stress and pressure associated with trying to keep up with payments.
There are of course pros and cons to a trust deed, it’s not all plain sailing but for people that are eligible, it is often one of the best ways to get out of debt. Trust deeds are only available to Scottish residents that comply with a number of criteria, including the total amount of debt owed.
#1: Affordable payments
The biggest advantage to a protected trust deed is that debtors will no longer have to worry about where the next meal is coming from or whether they can afford to keep a roof over their head. When you enter into a trust deed, your insolvency practitioner will assess your financial situation and only propose a realistic and affordable monthly payment.
#2: Debts written off
Once the trust deed has been completed any outstanding debts will then be written off by your creditors, allowing you to start afresh. When your creditors agreed to the trust deed they were aware that you would only be required to pay the fixed monthly payment. To ensure that you can be debt free in three years, make sure you pay on time and in full every month.
#3: Prevent further interest and charges
As soon as your trust deed has achieved protected status and been finalised, your creditors are unable to add any further interest charges or penalty fees. One of the biggest problems with high levels of debt is the additional charges added on to the capital, as these are often what start the problem spiralling out of control. With a trust deed you will no longer have to worry about extra charges and can focus on repaying what you do owe.
#4: Free from creditor hassle
If you have been struggling with your debts for a while you will be well aware of the stress that dealing with creditors can cause. The reminder letters, constant phone calls, potential visitors to the home can be enough to send you into meltdown. Fortunately, once you are in the trust deed, all communication will be dealt with by your trustee so you don’t have to worry about speaking to your lenders.
#5: Keep your job
Although most employment is not affected by any of the debt solutions, there are some industries where you are unable to continue working if you have been made bankrupt. The most commonly affected jobs are in law, financial services, armed forces and government. If you think that your job would be affected by being made bankrupt then you may want to consider a trust deed instead.
These are the main advantages to a trust deed but there are many more things to consider too. Before you commit to a Scottish trust deed, discuss your personal circumstances with a debt help expert.