Can Trust Deeds Help Me Get On Top Of My Debts?

By: Dipika Patel

Whether you're finding keeping on top of multiple credit card debts to be problematic or are unable to meet monthly mortgage payments, you may find yourself in a position where you are looking to get debt advice.

You will usually find there are a number of options available to you, however if you live in Scotland you may want to consider the role trust deeds can play in helping you get on a firmer financial footing.

Working in a similar way to an individual voluntary agreement, trust deeds see you arrange with your creditors about what percentage of your debts you can realistically pay back over a specified period of time, usually three years.

Such an agreement is made on your behalf by a licensed insolvency practitioner - known as the trustee - and may prove to be a useful solution if you find that you're constantly facing demands to repay money which you just do not have.

And if you feel particularly under the strain from creditors getting in touch with you to request that you pay them money, you might want to consider opting for a protected trust deed.

This particular kind of trust deed legally prevents lenders from contacting you asking for money. In addition, any interest and charges attached to your debts are frozen, allowing you to concentrate on getting on a firmer fiscal footing.

For a trust deed to gain protected status, your trustee needs to place a notice in the Edinburgh Gazette and then send written notice to all your creditors informing them that you want a protected trust deed, along with a copy of the announcement that has been published in the newspaper.

Creditors have five weeks to raise any objections to this. And while trust deeds typically become protected automatically, should your trustee receive written complaints from the majority of your creditors or those lenders that represent at least one-third of your overall debt you may be unable to take out this kind of debt management solution.

While trust deeds are typically a cheaper and more flexible option than bankruptcy, you may want to bear in mind that such an agreement is legally binding. If you are unable to keep up with the agreed repayments you may still end up being made bankrupt and your credit rating will also be affected.

However, if you are disciplined enough to keep on top of the agreement, a trust deed can be a useful way to get out of debt problems and significantly reduce the amount that you have to pay creditors.

Article Source: http://yourfinance.co.za

About The Author
If you're looking for debt advice then Debt Options can help. Our team have over 11 years experience of assisting people with serious debt problems and can provide advice on solutions such as trust deeds.