Scottish trust deed is an agreement designed for people who struggle with their monthly repayments. A trust deed helps to pay off your debt with the finances you have at hand. Once you enter a trust deed your creditors can’t apply further charges or interest. Don’t Fret About Debt serves as a trustee to manage your trust deed.
The trustee acts on behalf of both you and your creditors in order to achieve the best possible financial compromise. This means you no longer have to make repayments to your creditors or deal directly with them.
You are protected from any recovery action during the term of the trust deed as long as you maintain your monthly contributions. At the end, the remainder of your debts will be written off – your creditors can’t ask for any further funds.
Advantages of a Protected Trust Deed:
- The trust deed lasts for a fixed period of time, usually 4 years.
- You no longer have to deal with your creditors yourself, the IP takes care of this.
- At the end of the trust deed, you are debt free.
- The monthly payments will be affordable, based on your income and expenditure.
- A better alternative to bankruptcy for both you and your creditors.
- Your home and other assets can be protected.
Disadvantages of a Protected Trust Deed:
- In some cases, assets will have to be sold for the benefit of the creditors.
- There are some circumstances where trust deeds don’t become protected. For example, you need agreement from at least half your creditors. A failed trust deed may result in sequestration.
- Your credit rating will be affected for around 6 years.
- A protected trust deed may prevent you from doing some jobs.
- Certain debts cannot be discharged by a protected trust deed. For example, student loans, fines/penalties/compensation/forfeiture orders or any liability due to fraud.