Scottish Trust Deeds - Exposing the Myths

Posted on Thursday, 19 January 2012 in Debt NewsIn 2011 people across Scotland from all walks of life found themselves in severe financial difficulties and almost 9,000* are estimated to have used Scottish Trust Deeds to manage their debts in Scotland.

In the same period, Trust Deed Scotland have spoken to many people and helped individuals with debt problems to understand what is a trust deed, how it works and the alternatives. There are some myths about Scottish Trust Deeds and these can include:

You will need to go to court with your lawyer to negotiate your debt repayment

You have a legal obligation to repay debt that you knowingly and fairly accrue. Creditors and debt collectors sometimes like to perpetuate a sense of urgency that if debt is not repaid you will end up in court. Actually in fact, even if you do sign a Scottish Trust Deed or any other form of debt management you will not have to go anywhere near a court. Neither would your representative.

For a personal unsecured debt such as a credit card or bank overdraft, the only way that you ever end up physically in a court is way down the line of enforcement and this would only happen after an extensive period of evasion and un-cooperation. The opposite of what you are trying to achieve by offering to repay your debts with a Scottish Trust Deed.

You will lose your home

Homeowners can still use a Scottish Trust Deed to clear their debts but it comes down to the equity that you have in your property. Over the last couple of years, property prices have come down and many people may find that their home is not as valuable as they have previously thought.

It is also possible to extend the repayment term to 48 months AND there are alternatives such as the Debt Arrangement Scheme.

The Debt Write Off headline is a scam

You can write off up to 90% of your unsecured debt. It does sound too good to be true but yes it is true, you can write off a substantial amount of your overall unsecured debt.

All you need to do is continue with your repayments and after your repayment period has ended any remaining unsecured debt is written off.

The Trust Deed fees and monthly payments will be too expensive

Some intermediaries charge setup fees. Trust Deed Scotland do not and never will do. The fees that insolvency practitioners charge for their services tend to be from £2,500 to £4,500 but these fees are added to the overall unsecured debt and you amount that you pay on a monthly basis does not change.

The amount that you pay on a monthly basis is based on your ability to realistically repay your debt at an affordable level. Prior to signing, your Trustee will examine your essential expenditure before proceeding. You will not be referred for a Trust Deed should you not be able to afford your propsed repayment. If you can't afford the proposed repayment, there are other ways that we can help you so just try to be honest and your Trustee will be completely transparent with you. It is in neither party's interest to agree repayment schedules that will more than likely fail.
If you feel like you are being pushed into a repayment amount that you cannot afford with any organisation that you speak to then walk away.

You will need to sell your car and other household goods

Most people will be allowed to keep their car. If you own a car and for example you require it to get to work and back then common sense should suggest that without the vehicle your income could be seriously impacted. Again it is in no-one's interest - unless you own a vehicle that can be deemed excessive. So if you own a Maserati GT then you may be asked to downgrade but otherwise you should be fine - call us for advice.

Your household goods are also safe unless of course you had an asset of particular value such as a luxury painting again call us for advice.

You will never get any credit ever again

The truth is that during the repayment of Scottish Trust Deeds, individuals are not allowed to get further credit and the trust deed will be shown on your credit rating for six years from the date of signing your trust deed. It will most definitely be more difficult and expensive to get credit after the repayment period but you can rebuild your credit rating using the same techniques that individuals with no prior credit would do.

After your experience with debt and your new found ability to live within your means, you will have the knowledge to avoid getting into the same position again. After discharge, you will still be able to get a new mortgage although bear in mind that it will be more difficult to do so.

You can setup a Trust Deed using a template letter
Unfortunately you cannot setup a Scottish Trust Deed yourself. Only an Insolvency Practitioner can do so. It takes years of studying to become an IP so perhaps it can be argued that the level of experience and knowledge that an IP helps to ensure that the protection rates are higher.

There are no other realistic alternatives to Trust Deeds other than Sequestration

If you do not qualify for a trust deed or even if do, you may find that the debt arrangement scheme is a more adequate tool for repaying your debts. No matter what your position is, there is always a way and the best way that you can find out what you can do is to speak to an experienced money advisor as soon as possible. You can get instant, free and confidential advice by calling 0141 221 0999.

You should feel embarrassed about accruing so much unsecured debt

Far from it! There are many reasons why people are getting into debt in Scotland and you are not alone. Our advisors are experienced and have spoken to thousands of people with different levels of debts and different ways of getting into their position. The one thing that binds all the people that we have spoken to together is that they are seeking help to repay their debts and that they are taking action to solve their debt issues. Far from being embarrassed, our clients feel better about themselves and feel proud about what they are about to achieve.

Your details will be published in your local newspaper

Your name will not be published in the headlines of the Daily Record or within the notices of the Glasgow Evening Times! It is a requirement for details of your application to enter into Scottish Trust Deeds to be published within the Edinburgh Gazette but this is a paid-for publication read by people with a vested interest in personal insolvency.
If you are struggling with debt, you can help yourself get out of debt by speaking to a qualified money advisor and talking about your debts.

You speak to an impartial money advisor by contacting your local authority and Citizens Advice Scotland but you can get free instant advice now by calling us on Glasgow 0141 221 0999, Edinburgh 0131 278 0790 and Aberdeen 01224 418 267.

* Official figures for 2011 not yet published but year-to-date figures and analyse suggests a final figure close to this number.

Your Employment Status --SELECT-- Employed Unemployed Self-Employed Retired Student Your Total Unsecured Debts --SELECT-- £1,000 £2,000 £3,000 £4,000 £5,000 £6,000 £7,000 £8,000 £9,000 £10,000 £11,000 £12,000 £13,000 £14,000 £15,000 £16,000 £17,000 £18,000 £19,000 £20,000 £21,000 £22,000 £23,000 £24,000 £25,000 £26,000 £27,000 £28,000 £29,000 £30,000 £31,000 £32,000 £33,000 £34,000 £35,000 £36,000 £37,000 £38,000 £39,000 £40,000 £41,000 £42,000 £43,000 £44,000 £45,000 £46,000 £47,000 £48,000 £49,000 £50,000 £51,000 £52,000 £53,000 £54,000 £55,000 Over £55,000 This includes unsecured loans, credit cards, council tax arrears, bank overdrafts etc.

Note - student loans cannot be included in a Trust Deed. Your Monthly Net Income This is your monthly take home pay including any other income

Example
Take home pay £1200
Child tax credit £200
Total net income £1400 Your Monthly Expenditure This includes all rent or mortgage payments and all other fixed outgoings that you pay each month.

Excluding your payments for your unsecured debt. Are You A Homeowner? --SELECT-- Yes No

(Homeowners) Estimated Equity None Don't Know 5000-10000 11000-20000 21000-30000 31000-40000 50000+ Equity Example:
Mortgage - 72k
House Value - 80k
Your Equity - £8000

Dont worry if you don't know your equity.
Just call us on 0141 221 0999

Your Nearest City --SELECT-- Glasgow Edinburgh Stirling Perth Dundee Aberdeen Inverness We have a network of Trust Deed providers throughout Scotland

Your location will help us recommend the best providers.

Title --SELECT-- Mr Ms Miss Mrs Other First Name Last Name Email Address Phone Number Why Do We Need Your Phone Number?

Although you will get an instant quote indication, we still need to contact you to get more detailed information regarding your financial circumstances.
All calls confidential.

Your privacy is important to us. Your Details are held in the strictest of confidence and we will only request information required to find your best solution. Your details will NOT be shared with third parties.

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