You have many alternatives to become debt free and Scottish Trust Deed is one of them. It is a better alternative to sequestration but if the situation is not too bad, you should consider other alternatives like debt management, debt consolidation etc.
However, if you think that Scottish Trust Deed is the only option, there are certain things that you must know:
- After you have signed the Trust Deed, rights of your assets will be transferred to the trustee. Your assets include your home and other immovable properties. The trustee can sell your assets to pay the creditors if you fail to pay your debt as per the terms of the Trust Deed.
- If the Trust Deed is not a protected one, the creditors may take further legal actions against you to recover their money.
- If you take a new loan after signing a trust deed, it will not be covered by the existing trust deed. The new creditor is free to take legal actions against you to recover money.
- A Protected Trust Deed will affect your credit rating like bankruptcy or sequestration.
- Details of the trust deed are published in “Edinburgh Gazette” and once the creditors agree to the trust deed, it is recorded in Register of Insolvencies (public record).
- Signing a Trust Deed would not entail you to hold the position of director in a limited company. You may also be barred from holding positions in some of the public offices during the tenure.
- The trustee will charge for everything they do to settle your debts. They will pay the creditors only after they have collected their fees.
- Prior to signing, any income or arrestment will be validated by the Trust Deed.
- You can continue working and hold a bank account (if the bank agrees).
- Trust Deeds do not cover secured loan, student loan, court fines, penalties etc.
- If you do not contribute according the trust deed, the trustee may file for bankruptcy.
The consequences of Trust Deed depend on your circumstances and the creditor’s acceptability. Do not forget to get a good trustee as a lot of things will depend on him or her.
If you have any question, please write it here. We will try to answer as soon as possible.
Hi,
I am thinking about applying for a trust deed. I just wanted to know if I can include my student loan into a trust deed as it is not a secured loan!
Thanks
Sophie
Hi Sophie,
Thanks for your comment. But you did not mention when you took the loan! It could have helped.
Sorry to say but you cannot include student loan in your trust deed although it is an unsecured loan. However, you can postpone the monthly payment till you reach a certain repayment threshold.
I was in 16k of debt due to a failed business, took a trusteed out and all my hassles vanished overnight from creditors. Im now discharged from it but still gunna have another 3 years of not being able to get credit. But to be honest it has not affected me. It has made my life so much better. I am so in control of my finances now. Please seek advice before but its well worth it.
I have just come out of a trust deed and am now about to start divorce proceeding. My Lawyer says that I am entitled to half the assets my husband had at the time of separation. This was also the time of the start of my trust deed. The reason for the split was that I had concealed all my debts from him since we met and these were found out. Obviously all the money was in his name.
I would love to be entitled to the half the amount of the time of separation but am worried that this will affect terms of the Trust Deed I entered. I think he would contact them as he has spent a lot of it since fighting for custody of our daughter, I had legal aid he could not get it get so is not happy to pay half the money at time of separation but is happy to give me half of what is left.
What are my options?
Claire, if you had received these assets during the Trust Deed your creditors would have been entitled to a portion of it.
Because you have been discharged from the Trust Deed, you can claim half the assets and keep 100% of it.
I am currently reviewing my finances and considering entering a trustdeed…I am a teacher and need to be assured this won’t affect my position???
I feel it is the best way forward for myself and to be honest reading what people have said about them and how they work I am feeling relieved about getting my debts under control.
Hi Euan,
Trust Deeds are for Scottish people. If you are from Scotland, Trust Deed can be the best option to fight off your debts. It is better to protect yourself instead of getting bankrupt. As for entering a Trust Deed, you can be rest assured that it will not affect your position and your job. Though your Trust Deed will be published in the Edinburgh Gazette, but then it is not a regular newspaper. It only publishes legal notices and is published only on Tuesdays and Fridays.
You can read our article on Edinburgh Gazette here: http://www.yesdebtfree.co.uk/articles/trust-deeds-edinburgh-gazette-social-stigma/.