If you’re thinking about various debt solutions, then it’s likely you’ll have lots of questions and queries. In this article we answer some of the most frequently asked questions about Scottish Trust Deeds.
Q. How do I find out if I’m eligible to enter into a Scottish Trust Deed?
A. In order to be eligible for this type of arrangement then you’ll need to have debts of at least £5,000.00, be a Scottish resident, have enough money to make monthly repayments over a set period of time and ideally have either property or assets which can be sold.
Q. How much will I have to repay each month?
A. This very much depends on your current income and outgoings. Once you’ve chosen a regulated advisor, he or she will help you to work through your finances and will see what sort of disposable income you have. If you have enough disposable income to pay off your debts in full then it’s likely you won’t qualify for a Scottish Trust Deed.
Q. What will happen to my home?
A. If you own a property then you may be required to sell it in order to raise money to pay off your debts. That said, if there’s very little (or no) equity in your home it might be excluded from Trust Deed. What’s more, if you have other family members living in the property you can also apply to the Sheriff Court to request that any sale be refused or delay for up to 3 years.
Q. How much does it cost to enter into a Trust Deed?
A. Unfortunately practitioner fees can be very expensive so it’s important you ask about their fees before you enter into any type of arrangement with them. Your chosen advisor will charge a fixed upfront fee plus a percentage of the assets that they recover as part of the running Trust Deed.
Q. Is it true that my debts will be written off by entering into a Trust Deed?
A. If you enter into a ‘protected’ Trust Deed then any remaining balance will be written off at the end of the arrangement. If, however, the Trust Deed is ‘unprotected’ your creditors may still be able to pursue you for any remaining balance at the end of the arrangement. Your advisor will be able to give you more information about which type of Deed might be best suited to your individual circumstances.
Q. Will a Trust Deed affect my credit rating?
A. Yes. If you opt for a Trust Deed then this will be noted on your credit file for a period of 6 years from the date on which you enter into it and may make it difficult for you to obtain credit in future.
Q. Are there any alternatives to a Trust Deed?
A. Yes, there are different courses of action you could consider. You can obtain advice on these from any Citizens Advice Bureau or debt charity – details of which you’ll find online.