If you have taken out a trust deed to help manage your debt, you’ll likely be wondering what happens when trust deeds finish.
As your trust deed term comes to an end, you will enter what’s known as the trust deed discharge process. As long as all has gone to plan, this means you have reached the end of your agreement with your creditors and have paid off all your outstanding debt.
So how does it all work?
How long does a trust deed last?
Typically, a Scottish Trust Deed will last for a term of four years. During this time, you will make regular monthly repayments to your creditors as you work to pay back your debt, sticking to a plan that’s been agreed in advance.
We say “typically” because a trust deed term can sometimes last longer than 48 months which would be arranged prior to entering your trust deed.
And you may find yourself in a position to pay off your debts earlier, such as through selling a property and releasing equity. It’s important to note, though, that both of these arrangements need to be formally agreed before the trust deed is set in stone.
What happens when you’ve completed your trust deed term?
After your trust deed is finished, you are discharged from it, as long as you have met the obligations agreed to at the start of the process.
The discharge process should take around a month – if it’s taking longer, contact your insolvency practitioner to ask why.
Once discharged, you are officially debt free. This should reflect on your credit score within 3 months. If your debts are not shown as satisfied within this time, contact your creditors and ask them to update your credit file. You can now begin rebuilding your credit.
How long does a Trust Deed take to set up?
Normally, it takes between 35-56 days for your Trust Deed proposal to be drafted by the Insolvency Practitioner. This may change depending on the complexity of your case. The proposal is then passed to the creditors for approval, who may then take up to 14 days to approve.
Depending on the length of your trust deed term, you may find it difficult to obtain credit for the next year or two and you may only be offered higher interest rates during this time.
However, six years after your trust deed started it will no longer show on your credit file.
If you’d like information about entering a Trust Deed, try our Trust Deed Debt Calculator to see how we could help.
How do people rebuild their credit scores after Trust Deeds?
- Spread out applications for credit.
- Get a credit card with as low interest as possible.
- Make small monthly purchases on the credit card and clear them in full. This enables you to make sure you don’t build up debt again.
- Make sure you are on the electoral role.
- Check your credit file for any inaccuracies. If there are, you can ask the company in question to fix them.
- Don’t take out joint finances with anyone with poor credit.
- Ask for a notice of correction to be put on your credit file if you had a reason you could not make payments, for example, hospitalisation or redundancy. (These do not have to be taken into consideration but may make a difference to some lenders if you can justify late payments that have affected your credit).
What have others said about their trust deed discharge process?
Trust Deed Scotland has a 99% satisfaction rate. Don’t just take our word for it – here are what some of our customers have said about the process and how long does a trust deed last:
“From the 1st initial call right through to signing the paperwork it was great to have the professionalism, help and reassuring assistance from Danielle and Deborah.
They were both understanding of my situation and I highly recommend them both as well as Trust Deed Scotland.”
Al, 5/5 – Al had a trust deed that lasted 48 months.
“Excellent people put my mind at rest after many months of worry. Helpful, reassuring and friendly people!”
Chris Forster, 5/5 – Chris looked at solutions DAS Scotland and Trust Deeds which lasted 4 years. After which his unaffordable debt was written off. Chris now enjoys a lift after debt.
“I suffer from anxiety and find it difficult to contact people I don’t know. The team was fantastic with me, helping me and catering agents to my needs. They have helped me so much and now I don’t feel as anxious and I can answer my front door again without worrying.”
Read our trust deed reviews and learn what everyone is saying about their Trust Deed Scotland experience to help you decide whether it‘s the right debt solution option for you.
If you’re based in Scotland and are in need of debt advice, contact us for a confidential chat.