Protected trust deeds are only available to residents of Scotland that are in financial difficulty with debts over £6,000 and meet specific criteria.
Provided you have maintained all of your trust deed payments, you will be free of all unsecured debts within 4 years.
Trust deeds are voluntary agreements between you and your creditors (the people you owe money to). You agree to repay part of what you owe them. A trust deed will normally include a contribution out of your income for a specified period; this is usually 4 years but can vary.
Each case is individually assessed, much in the same way as with an IVA in England or Wales. As such, you may qualify with £6,000 or more debt from 2 or more creditors.
Will my credit rating be affected?
Yes, by entering into a trust deed, you will no longer be repaying debts at the originally agreed amount, this means your credit rating will be affected for six years.
A record of the trust will be held on your credit file for up to six years following completion.
- Have a fixed term, usually 4 years.
- Stop letters and phone calls from your creditors.
- Prevent you from being made bankrupt / sequestration.
- You will be tied into the agreement for the full term.
- Your details will be recorded on the insolvency register.
- You will not be able to get additional credit of more than £500 without your supervisor’s consent.
- Homeowners will need to look into releasing equity from their home.
- Failure to comply with the IVA may lead to bankruptcy.
- Your credit file may be affected for six years.
- Certain debts will still be outstanding.