A concern for some of our clients is whether their home is blacklisted if they start a Trust Deed.
Only individuals have a credit rating. Your credit rating is personal to you and the property itself is not ‘blacklisted’.
- As a homeowner, your property is not blacklisted.
- As a tenant, your landlord’s property is unaffected. This is also true of any housemates that also reside in a property.
- If you’re married, or in a civil partnership – The other party in the relationship is not affected by your credit.
- If you live with your parents, they or any other family members are not affected either.
However, if you have joint borrowing, joint accounts, or a guarantor loan for example, in this instance the responsibility to pay the debt falls onto the other party. In which case, if the debt isn’t paid, then that would impact their credit rating. You can find out more about Do Trust Deeds affect a spouse or partner.
These myths exist partly because of mistruths online but also because debt collection agencies use this is a threat to demand payment, using any means necessary.
When we have unaffordable debts, it’s only natural to worry about how our own finances affect those around us and together with the stigma attached to having debts, this creates a toxic perception of how bad the situation is. The fear of a home being blacklisted as a result of our own actions and our own unpaid debts is enough to deter many individuals in Scotland from seeking help over their debts.
If you are putting off getting help because of how you think it may impact those around you then we suggest having a read through our 3,000+ Trustpilot reviews, where many people talk about the same kind of fears and how they found the strength to do something about their debts.
As we often say to our clients – If you do something about your debt today, you can stop worrying about it tomorrow.
We’ve previously written about your credit score and debunked credit score misconceptions.
Does a Trust Deed affect my Credit Rating?
There’s no getting away from the fact that starting a Trust Deed, a Debt Arrangement Scheme or Sequestration will have a detrimental impact on your credit rating. It will take a while to rebuild your credit rating once the solution has been complete meaning that obtaining credit will become harder, and interest rates will not be favourable. However, with careful planning – many people have gone on to get mortgages after a Trust Deed has ended. A clear signal that a negative credit score can be overcome.
When you are researching whether a Trust Deed is a good idea, then a credit rating may be an important factor for you. Where possible you can consider fixing your credit rating without having to consider a formal debt solution. You could consolidate debts using a loan or additional credit facilities.
However, we would always advise against about borrowing your way out of debt and would instead suggest that you discuss your circumstances with a qualified debt advisor in order to find out what your options are.
Getting yourself further into debt in order to protect the home being blacklisted, while meant with great intentions, isn’t required and will almost always result in a bigger problem with your debt further down the line.
Do I need to tell my landlord about my Trust Deed?
No. your landlord does not need to be informed about your debt repayment arrangements. However, should you wish to take on a new tenancy with a different landlord, a credit search may be undertaken.
Firstly, we’d advise you to be upfront about it before you approach the new landlord or letting agency for a new tenancy.
Secondly, if you have already been served default notices and missed payments – consider your credit score in this instance.
Whether you have unaffordable debts, or not – you should never pay non-priority debts over priority debts such as a mortgage or rent. if you have a good record of never missing a rental payment then you can, of course, use this as proof that you are a reliable tenant.
Getting help with debt in Scotland
You can get debt advice in Scotland today by calling Trust Deed Scotland® on 0141 221 0999. Our qualified debt advisors have been helping people out of debt since 2009 and over twenty thousand people have been able to enjoy life after debt thanks to the solutions we’ve put in place for them.