Scottish Trust Deed – The Scottish Debt Solution

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, what exactly is a Scottish Trust Deed? To summarise, it is an agreement between your creditors and yourself to repay a lower, set amount each month towards your debts for a 36 month period. Any remaining debt is then written off after the period has elapsed. It is very similar to an English Individual Voluntary Arrangement but with a 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!

The Trust Deed solution does suite everyone… Trust Deeds do not suite everyone, it all depends on your circumstances whether or not it is right for you. They are designed for people who genuinely finding it a struggle to make their repayments each month and cannot find any other solution, i.e. borrowing from friends and family. They would be ideally suited to someone who has recently lost their job and are struggling to get back into employment, had taken a salary cut or someone who has just bitten off more than they can chew with credit cards and loans. Trust Deeds can be extremely beneficial to homeowners facing bankruptcy as they can prevent your house being repossessed by the banks.

Another important bonus of a Trust Deed is the interest and charges are frozen, meaning the debt will not accumulate like it probably is now where the majority of your monthly repayment is going in the banks pocket and only a small percentage of your debts are actually being paid off each month.

There are downsides though. Your credit rating will be affected during the 3 year period whilst you are in the Trust Deed program and wont recover until long after, but if you are in a serious position with your finances the likely hood of you wanting to obtain further credit after the period is slim as most people would want to steer clear of debt for good! So, on that basis you will probably not require the use of your credit rating. Your reputation will also be damaged, although this is not important to everyone. I think relieving the stress of being in debt actually outweighs this by miles!

For more benefits on Protected Trust Deeds and how it can help you get on the road to financial freedom. For more advice on Trust Deeds visit our website

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