Ever heard of a Trust Deed? No? I didn’t think so, don’t worry, not many people have, but just to enlighten you Trust Deeds are actually a highly effective solution to help people who are struggling with their finances to get out of debt for good. A Scottish Trust Deed is not something that has been conjured up by a financial company, it is an approved scheme which was set in place by the government to help struggling Scottish residents become free from their debt problems. Scotland, like the rest of the country, and the world in fact, has its fair share of debt problems, mainly brought on by the recession which, in turn, was bought on the by the banks. Those high flying bankers have left the economy in a state of disarray through sheer greed. Now they are sat their laughing while the governments pumps more money into yet another bailout, and as usual, it’s the taxpayer that has to foot the bill. It will take years for the economy to recover from the financial crisis and it will be our grandchildren who will be sharing some of the burden. Anyway, back onto the main topic now…
What is a Scottish Trust Deed? In a nutshell, it’s a legally binding agreement between you and your creditors to repay what you can afford towards your debts over a specific period, which is usually 36 months (3 years), any debt left over after that period is written off. It is a lot like the Scottish equivalent to an IVA (Individual Voluntary Arrangement) although the criteria is slightly different, but more in your favour actually.
200 per month is not the set amount for an IVA There is a lot of misleading information in circulation regarding IVAs. Most people assume you pay 200 per month and then in 60 months you are debt free, but to be honest it all depends on your circumstances. The main factor is that you must be able to repay at least 25% of the total debt over the 60 month period, so if this works out at 200 for you, great! But it doesn’t for everyone.
There is a set period for a Trust Deed which is 36 months, whereas an IVA is 60 months, 2 years in comparison and the minimum debt level is 10,000 as apposed to 15,000 (5,000 difference). The minimum percentage that must be repaid is only 10% as apposed to 25% with an IVA and the minimum repayment level is 150 per month, 50 less than an IVA. So if you are resident in Scotland, can afford at least 150 per month and owe over 10,000 in unsecured debt your luck is in!
Trust Deeds are not for everyone… So you have decided to look into this, but keep in mind, Scottish Trust Deeds are not for everyone. They are only meant for people who are struggling to repay their debts and cannot find a viable solution to their debt problems. You may have taken out too much debt, had a pay cut or lost your job to redundancy, all of which would be viable reasons to look into this Scottish Debt Solution. If you own your own home a Trust Deed would be the best option if you are in financial difficulty as it can prevent it from being repossessed by the banks.
Trust Deeds have an additional bonus… the interest and charges are frozen! Meaning your debt level will not increase like it probably is now and the majority of your monthly repayments go towards the banks profits and only a minute percentage of your debt is actually paid off each month.
Like any debt solution, there is a downside… and in this case it is your credit rating, which will be affected during the 3 years period and may take some time to recover thereafter, but if you are in severe dire straits with your finances it is highly likely that you won’t to obtain any further credit in the future and want to steer clear of debt for good! So it is most probable that you will not require the use of your credit rating. The next downside is your reputation, which isn’t a problem to all of us, but there will be some of us out there who are conscious of the fact they are obtaining help with their finances and wont want people to know about it, but I guess all that depends on you as a person.
For more information on how to write off debt in Scotland with a Trust Deed visit our website. Use our Trust Deed calculator to see if you qualify. Get on the road to debt freedom!