Although the letters and calls you may have experienced recently may suggest otherwise, your creditors want to help you with your situation and recover as much of their debt as possible. As long as you communicate honestly with them about your situation, they should be understanding. In most cases they will accept less than what you owe, if that is all you can afford, providing they are satisfied that you will keep to any agreement. Sequestration (bankruptcy) is costly, time consuming, and a large amount of the money raised from a sequestration (bankruptcy) will be used to cover professional fees, therefore creditors would in most cases prefer not to resolve the situation in this way.
A Trust Deed offers the simplicity of a repayment arrangement between yourself and your creditors with legal backing, without the high cost and low returns of a sequestration (bankruptcy). Your creditors will welcome a Trust Deed where appropriate, as an effective resolution to the situation that you find yourself in.
It is dependant on each individual case, and our trained staff will help you through the process and come to a decision.
We will detail your household income (take-home pay and benefits) and expenditure (the cost of living i.e. food, utility bills and secured lending). No account has been taken to repay your unsecured debts at this stage. By deducting your expenditure from your income you are left with an amount (often called ‘Residual’ or ‘Disposable’ income) which is all you have left to service your unsecured debts. In the example below, we would expect you to make a monthly contribution to your Trust Deed of £250 to repay your unsecured creditors.
| Monthly Income | Monthly Expenditure | ||
| Your take home pay (inc. overtime) | £1,200 | Mortgage/Rent | £700 |
| Partner’s take home pay | £690 | Council Tax | £100 |
| Other income (Benefits, maintenance etc) | £100 | Water/Gas/Oil/ Electricity/Phone/Mobile | £100 |
| Food/Household/Clothing | £600 | ||
| Car Expenses/Finance | £190 | ||
| TV Licence/Rental/Sky | £30 | ||
| Public Transport | £20 | ||
| Total household income | £1,990 | Public household expenditure | £1,740 |
| Monthly Disposable Income | £250 | ||
You will be dealing directly with a licensed Insolvency Practitioner. An Insolvency Practitioner is the only type of financial advisor that is seen as an 'expert' under law.
No doubt you have spoken to other so called experts before; you know the type, those who have had 2 days training in a call centre! They are not experts. Even mortgage advisors are not defined as experts under legislation.
Insolvency Practitioners study for years and years to pass very difficult exams, mostly after previously qualifying as a Chartered Accountant or Lawyer. These experts are then qualified to apply Insolvency Legislation and act as Administrators and Liquidators of companies. Some Insolvency Practitioners choose to provide their valuable expert service to help indebted individuals to sort out their financial problems without having to borrow more money.
Yes, but don't worry. Borrowing too much money is what got you into this over indebted financial state in the first place. A poor credit rating will affect your ability to borrow more debt, but the last thing that you should be thinking about is borrowing more money, whether unsecured or secured.
If you are making monthly payments that are lower than the contracted amount or have missed payments then your credit rating is already damaged.
A Trust deed will allow your credit rating to be repaired more quickly. As soon as you enter a Trust Deed it is stamped on your credit file and lasts for 6 years. However, the Trust Deed lasts for 3 years, so in reality you have 3 years where you may want to borrow with a poor rating. After that, the Trust Deed is removed from your credit file and you are shown as having no debt.
In principle, a Trust Deed is the Scottish equivalent of an IVA.
We have tried to provide some more information on this website, but the best route to take is to contact one of our Trust Deed advisors who will be able to talk you through your options.
You will not necessarily lose your house, but any equity will be taken into account and may be released to help pay off your debts and pay something towards your creditors. If the property is joint-owned, then it is likely that an appropriate portion of the equity will be taken into consideration.
It will cover most of the debts that you have, but there are some which will not be written off. These include mortgages, secured loans, student loans or fines.
It is very important that you contact your Insolvency Practitioner immediately if your financial arrangements change for any reason. If you do not keep up your repayments then your creditors may start bankruptcy (sequestration) proceedings against you.
Any remaining debt will be written off.
Secured debt works against the assets that you own, so if you fail to keep up on repayments then these may be at risk, items include your car or house. Unsecured loans are not held against any items.
The process of setting up your Trust Deed will be dependant on your individual circumstances, but will take about six weeks on average.
There are other alternatives to a Trust Deed if it is not approved, and our One Advice advisors are here to help you with any debt solution plans.
No, it is a legal process that is agreed with your current creditors to repay your debts.
On average a Trust Deed will last 36 months.
No, any interests or charges on your accounts will be frozen from the commencement date of your Trust Deed.
This basically means that no further action will be taken on your account by the creditors.
No, your account must be handled by a qualified Insolvency Practitioner.