Trust Deeds are a means by which individuals can manage their debt if they live in Scotland.
Eligibility for the scheme is he/she must be resident in Scotland. In addition, they must have a level of unsecured personal debt which is at least £10,000. Finally, each candidate must have a full-time or part-time job. Self-employed individuals are eligible. However, they must be able to verify their income, which usually involves submission of the business' financial statements from the prior six months.
A Trust Deed is a formalised legal agreement between debtor and creditor where a regular monthly repayment is made to the creditor. The debtor passes over all their financial details to a trustee, who will act on their behalf. His will include details of income, assets (including property) and expenses.
They are designed for individuals who have taken on too much debt and aren’t in a position to repay it.
The terms agreed will still enable the debtor to manage to pay for household bills and associated living costs.
Interest rates and charges are frozen at the time both parties enter into a Trust Deed.
The agreements have legal backing enshrined in the Bankruptcy (Scotland) Act 1985 and are normally in place for a fixed period of 36-months. After this time has elapsed creditors are obligated to write off the balance of any debt.
The Trust Deed agreement is beneficial to both parties in that it delivers some regular payment to creditors and allows those in debt to be able to function day to day with reasonable provision made for living costs.
The process of drafting a trust deed takes between two and four weeks. The Trust Deed is then handed over to the creditor who may take up to 14 days to decide whether to agree to its terms.
One of the key benefits for those in debt that once a trust deed has been agreed then the creditor is no longer permitted to contact them under any circumstance.
A spokesperson at Trust Deed Scotland commented: ‘At Trust Deed Scotland we can help those in debt reach an agreement with their creditors. Our team of experts are on hand to advise those needing to address their issues of debt.’
This article has been written on behalf of trustdeedscotland.uk.com