The Scottish government offers a basket of debt solutions to her citizens fighting it hard to pay off mounting debts. For more reasons than one, a healthy credit score is not an option, but a necessity for every Scottish resident. When the numbers pitch below the threshold limit, your present as well as future credits start getting expensive. Most people tend to swipe their credit cards with gay abandon and do not carry a record of their monthly activities. Soon the unpaid credit blots up with phenomenal interest charges and fee for non payment/belated payment. The Scottish Trust Deed is a debt solution offered to debtors who find themselves in this situation or are marching quickly on that road.
When should you consider a Trust Deed?
A trust deed is not without its consequences and therefore, you must obtain competent advice before determining if this debt solution is the most appropriate way to wriggle out of your unsecured debts and start rebuilding your financial history. Your debt expert or an approved Money Advisor will take a comprehensive view of your financial situation and identify one of the debt solutions that answer your specific circumstances. The Scottish Trust Deed is a precursor to bankruptcy or sequestration. When your accumulated unsecured debts exceed £5.000 and you owe money to at least 2 creditors, and you have disposable income to pay off the debts, you qualify for the Trust Deed. Notice also that you must be a Scottish resident homeowner, tenant, or living with parents. No credit check or income verification is essential and even a CCI cannot stop your Trust Deed. Your spouse should be informed if you are applying for a Trust Deed.
What debts are covered by the Trust Deed?
All your unsecured debts will be brought into a single basket through the Trust Deed. This will help you make a single payment to the Trustee, who will then distribute the money equitably among the creditors.
What are your benefits?
To set up a trust deed, you must apply through an approved insolvency practitioner. At least 50% of your creditors by number of one third by value should agree to the proposal. Once the Trust deed is set up, your creditors agree to a lower repayment than what is actually due to them. All future interests and penal charges will remain frozen and you make a single monthly payment to the trustee, who in turn distributes the money equitably among the creditors. Any debt remaining unpaid on completion of the Trust Deed is written off. The Scottish debt arrangement scheme should also be considered as an alternative to the Trust Deed.
What are my challenges?
You should be punctual in making the committed monthly payments to the trustee. You may be asked to part with any accumulated equity in your home although you may not lose your home subject to your mortgage payments being regular. Other debt solutions may not be available to you if the Trust Deed fails. Your credit score will be impacted since the fact of your trust deed will be borne on public records. A trust deed lasts for 48 months and fresh credit may not be available to you during this period.