🏠 Property Assets While In A Trust Deed
When searching for advice regarding Trust Deeds in Scotland, many researchers are concerned whether the property they live in will be affected. Specifically, many are concerned about whether they will lose their home.
If you have invested a lot of time and money into your property and you have worked hard to keep it in good repair, it is likely you won’t want to take any risks that could threaten everything you’ve worked towards. Or, you may be living in rented accommodation and are concerned about telling your landlord about your situation.
Trust Deed Scotland is here to make it clear just exactly how a trust deed will affect your property assets.
🏠 Rented Accommodation
If you are arranging or seeking advice on Trust Deeds in Scotland, there is no reason for your landlords to know anything about it as you are not obliged to tell them.
However, if you decide to move to a new property and a credit check is done on you (a compulsory for some rental agencies), you are guaranteed not to pass. If you are in a rental situation with your parents, their property will not be taken into account when arranging your Trust Deed.
The assets of others will only be taken into account in a Trust Deed arrangement if they agree to it. A Trust Deed is based on your assets only unless others volunteer to help you.
If you are a homeowner, you are not obligated to transfer your property to your Trustee and can request it not to be part of the agreement with your creditors.
If you have equity in your property that could be released to pay off your debt, your creditors may not like the fact you have not transferred your property over. At this point, your creditors may refuse to agree to provide you with a Trust Deed.
At this point, they will be able to pursue you for any money owed and petition for your sequestration. If your Trust Deed receives a protected status, your creditors will not be able to chase you for money and can only deal directly with your Trustee.
However, at this point, you will have to transfer your property to your Trustee. They will then decide the best way is to pay your creditors. You can consider alternatives to a Trust Deed also.
🏠 Joint-Owned Properties
If you are not the sole owner of the property, but jointly owned, a Trustee will need the permission of the other owners.
It will also need the permission of anyone who has the right to live in the property before arranging a Trust Deed. If your co-owner(s) are not compliant and refuse permission, they have the power to force the sale through the courts. Once a ‘division and sale’ has been granted, the Trustee will sell the property and give the other owner(s) their share of the proceeds.
Your share will be used to pay what you owe to your creditors.
🏠 Second Properties
If you own a second property, you won’t necessarily have to sell it. It depends on the equity present in the property, whether it’s located in Scotland, the rest of the UK or abroad.
If there is a certain level of equity, your creditors may require it to be released at the end of the Trust Deed in order to pay them.
🏠 Homes with Little or No Equity
If you are currently in negative equity, or the equity you have is too little to release, your Trustee may still require the transfer of the property to their administration.
Sometimes the property is worth more at the end of the Trust Deed than at the beginning. Your Trustee could have a valuation completed at the end of the term to calculate if some of the equity can be released. However, it is also possible to buy out the Trustee’s interest in the property via a one-off payment. This can be paid by you or a third party. It is also permitted to add this sum into Trust Deeds in Scotland for payment along with any other unsecured debts. Once your Trustee has been bought out your property is fully protected.
They cannot later request equity to be released if it has increased in value.