New figure from the Insolvency Service indicate record levels of insolvency for 2009.
If you live in Scotland and are having difficulties paying off your unsecured debts, a Trust Deed could be the ideal solution to free you from your money worries. A Trust Deed offers people who are unable to repay their debts a way of establishing a monthly repayment schedule based on their affordability.
A Trust Deed is similar to an IVA , and is a legally binding agreement between an individual who finds themselves unable to pay their creditors and a licensed Insolvency Practitioner (IP). In this circumstance, the IP, who in other insolvency situations can undertake a variety of roles (see The roles of the Insolvency Practitioner) becomes the Trustee and as such oversees and regulates the deed (see Who is the Trustee ?). The Trustee will compile proposals to all of your Creditors in order to approve and administer the Trust Deed. If agreed to, the Trust Deed will then allow you to pay off as much of your debts as your monthly surplus income and assets will allow. The term for a Trust Deed is usually three years. After the period of your arrangement, any outstanding debts will be ‘written off'.
It is also possible to register a Trust Deed as ‘protected', on the condition that certain criteria are met. Once protected, all your creditors must adhere to the agreement and must refrain from contacting you (providing you meet the trust deed repayments). In contrast to a debt management plan - where the terms are informal and creditors do not always agree to freeze or reduce interest - under the protection of a formal trust deed, interest and charges will be frozen for the duration.
Although the process of a trust deed is a legally binding agreement, it is not as formal as sequestration (the Scottish equivalent of bankruptcy). There is no court involvement in setting up the process, but once you have signed the agreement you are formally committed to the arrangement - generally this is for three years, although it can vary.
For more information on Trust Deeds or alternative solutions, please click the links below.
Is a Trust Deed the right choice for me?
Alternatively, to discuss Trust Deeds or any other debt solutions, call 1Stop Money on 0800 012 4039 or fill in the online form and a 1Stop Money broker will contact you as soon as possible.
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