A trust deed is actually an agreement between the client and the moneylender which enables the client to repay as much as of the unsecured debts as possible over a limited period of years. And the rest of the debt which remains pending is written off. This is available only for people with unsecured debts within the range of 5,000 pounds or more, and with joint debts around 10,000 pounds or more. Here are a few points which you need to remember regarding the trust deeds.
- When you are able to reach a successful conclusion, the money lenders will write off the debt that is not possible for you to repay.
- The trust deeds don’t require any money for your mortgage, but as a regulation of trust deed you will be required to release some of the equity in your house. If you are not able to do that, then you will get an extension of the trust deed by 12 months.
- No initial fees are charged by the Scottish trust deeds; hence it will be easier for you to start paying off the debts straight away.
The working process of Trust Deed Scotland (debtadvisoryscotland.net) is to help you to repay all unsecured debts at once making one affordable payment each month. The payment of yours will be passed to the Insolvency Practitioner (IP). This person takes care of your deeds and distributes the agreed payments to your lenders. Now, the target which we help you to achieve is to make your deed a ‘protected deed’. Your deed will become a protected deed, as soon as 50% of your lenders who you owe at least one-third of the debt are accepted by them. After that, when your deed is protected, it will become legally binding, that means, your lenders will not be able to take any further actions against you as long as you keep on paying the monthly installments.
In most cases it is seen that the deeds lasts for 4 years. This means you will have to make 48 monthly payments. After you have successfully completed the monthly payments for 4 years, any remaining unsecured debts which is present in your deed and you haven’t paid is written off. Any debts which were not added in your trust deed will remain outstanding. The Scottish trust deeds provide you Insolvency Practitioners who can always help you in arranging a trust deed.
Similar to any debt solution, the trust deeds have few disadvantages too. It will be difficult for you to obtain credit during the period of time you are paying the debts as the records will remain in your credit history for 6 years. And if you possess your own home, you will be required to release most of the equity according to the rule of the agreement, though you won’t have the risk of repossession.