No. All Trust Deeds must be arranged and administered by an Insolvency Practitioner.
Insolvency Practitioners are highly qualified professionals with an extensive knowledge of insolvency laws and have undertaken a series of exams to become licensed to practice their services.
In the context of a Trust Deed, the Insolvency Practitioner will have specific knowledge of insolvency laws in Scotland and performs the role of a Trustee.
The Trustee aims to pay your creditors as much as possible of the debt owed to them. This normally involves you making an affordable contribution from your income and may involve some of your assets or property being sold so that the money raised can be paid to your creditors.
As part of the supervision process, your Trustee will perform a number of duties including:
- Ensuring your payments are collected from you on time.
- Undertaking annual reviews of your finances. Making any adjustments needed to keep it on course. Your annual salary may increase or decrease or there may be bonuses or commissions to be considered.
- Undertaking an assessment of your assets and arranging the valuation and sale of them if needed – it is common for you to be able to keep your assets but you may need to pay additional sums from your income in lieu of their value.
- Protecting you from legal action from your creditors and ensuring that creditor contact is reduced.
- Paying your creditors as funds become available.
- Finalising the administration and granting your discharge at the end of the Trust Deed period.
Trust Deeds – How do I apply?
The Protected Trust Deed is a legally binding agreement and can help you write off unaffordable debt, significantly reduce the amount that you repay each month and allow you to become debt free after a typical period of 48 months.
Like all debt solutions, Trust Deeds have benefits and risks.
Before you can commit to the Trust Deed as your chosen solution, you should first speak to an experienced money advisor to find out if you would qualify for a Trust Deed. All possible pros, cons and alternatives should be comprehensively explained to you at this stage.
With Trust Deed Scotland®, there are no setup fees for a Trust Deed but if you were to proceed with a Trust Deed, the amount that you repay in fees would be explained to you before you signed.
Ultimately, the purpose of a Trust Deed is to help you bring your finances back under control and allow you to free yourself from the burden of unaffordable debt. This will always be the most important aspect of any proposed solution.
For balanced, transparent debt advice, you can contact Trust Deed Scotland today on 0141 221 0999.
You can use our Trust Deed Wizard® tool to start the process of applying for a Trust Deed online now.
When might a Trust Deed be good for you?
A Trust Deed might be an option for you when you have:
- Over £5,000 of unsecured debt
- You have enough money to make a regular contribution towards your debt
- You are unable to afford your current repayments
Trust Deed considerations
- Your credit rating will be affected
- A Trust Deed may not be an option with certain job types
- If you are a homeowner and have equity in your home this may need to be realised to pay to your creditors
- Creditors can vote against a Trust Deed becoming ‘Protected’
You can get a more in-depth analysis of the pros and cons of Trust Deeds by calling our team on 0141 221 0999.
What can I arrange for myself?
You can attempt to repay your debts using an informal debt solution such as a Debt Management Plan.
With this solution, you will provide your creditors with a list of your income, expenditure and who else you owe money to. You’ll make pro-rata repayment offers and the creditors will decide whether to accept your offers or not.
You can often ask a debt charity to help you with this on your behalf.
It’s worth noting that if you do self-negotiate new repayment terms with your creditors, your credit rating can also be affected depending on the amount of the proposed repayment. This is due to you defaulting on the original agreement, where the payment amount is less than the contractual amount.
Another solution that you can self-administer or ask a debt charity to help you with is a full and final settlement. This is where you have access to a larger sum of funds which can then be used to settle on a percentage of the original debt.
In a Full and Final Settlement a creditor agrees:
- To accept less than the whole amount to clear it (‘full’), and
- that they won’t take action to recover the rest (‘final’).
This is more likely to an option further down the line when you’ve already defaulted on your original debt and you’ve been since been moved onto debt collection agencies.
At Trust Deed Scotland®, we will always have your best interests at heart and therefore we always recommend chatting through your situation with an experienced debt advisor in order to find out what your options are.
Alternatives to a Trust Deed
The Debt Arrangement Scheme (DAS) is a popular alternative solution to the Protected Trust Deed and also requires a qualified money advisor to set up on your behalf. Our Insolvency Practitioner at Trust Deed Scotland® can also act as your Money Adviser and help you complete an application for DAS.
To apply for Bankruptcy, known as Sequestration in Scotland, you will need to seek advice from an Insolvency Practitioner or any qualified Money Adviser from a debt charity, a local CAB or a Money Adviser at your local authority.