If you are from Scotland and want your debts to be protected against any harsh legal actions while enjoying the convenient payment options then Scottish Trust Deed is what you can opt for. The term Scottish Trust Deed may be new to you but there are many people in Scotland who enjoy this benefit offered by Scottish Legislation.
What does Scottish Trust Deed Mean?
The trust deed which is protected and legally binding, is the formal arrangement that is binding to the creditor and the individual who has availed the credit. The Trust Deed usually lasts for 4 years and one can take it longer if required. In every Trust Deed there is the trustee who is the Licensed Insolvency Practitioner (IP). The main aim of forming this deed is to protect Scottish residents against the debts larger than £8,000. According to Scottish Legislations, the excess debt is written off but this also has some exceptions!
What are the advantage of Trust Deed?
- Multiple payments on multiple debts get reduced to the affordable and easy single monthly payment.
- Trustee starts dealing with all the creditors and becomes the platform for creditors to raise queries and also to get the solutions to their queries. This will save your energy being wasted on unwanted calls and mails.
- The monthly payment would not be decided on your debt amount but it would be decided based on your capacity to pay back and it is usually decided after deducting your monthly expense from your monthly pay. The surplus or disposable income is then taken into account while deciding the monthly payment.
- Once the trust deed takes place, all charges and interest are frozen. Thus, your debt won’t keep on increasing due to the interest pile up.
- The trust deed generally lasts for 4 years and the debt that is left over even after this 4 years period is written off.
- The most important benefit of Trust Deed is that the creditor won’t take any legal action on the debtor or seize his car, home, or anything that is mortgaged.
What are the possible disadvantages?
- The trust deed would be protected only when the creditors don’t vote against it, but the creditors have full right to vote against such protected trust deed.
- Any equity on your home may be released to make the payment to the creditors. This is possible without selling of the property only when the payment is made by the family, third party, or remortgaging the property in question. One can also increase the payment term beyond four years in that case.
- It may affect your future credits negatively as you may not get credit based on your financial history that would also include this Trust Deed.
So, next time you are in some finance crunch, look for the protected Trust Deed but don’t ignore these pros and cons.
TrustDeedScotland offers the complete credit protection along with the secured debt, being the noted member of Debt Resolution Forum which is the body that regulates the professional standards in the industry. This company is trusted by many satisfied clients and that is further endorsed by more than 450 client reviews that make this company one of the largest Trust Deed Advice Companies.