Ask someone who knows if they have heard of a Scottish Trust Deed and I guarantee that most of them have not. Most people think that Trust Deeds or a 'Deed of Trust' have to do with the real estate market, which is to a certain extent, but the definition of a Scottish Trust Deed is really a form of debt aid aimed specifically at the residents of Scotland. Debt has become a growing problem not only in Scotland, but also in the rest of the United Kingdom and, indeed, in the rest of the world, as an increasing number of people are struggling to make minimum payments their debts.
What is a Scottish Trust deed?
In short, it is a legally binding agreement between you and your creditors to pay what you can pay for your debts during a specific period, which is usually 36 months (3 years), any debt that remains after that period is canceled. It is very similar to the Scottish equivalent of a VAT (individual voluntary agreement) although the criterion is slightly different, but it is more in your favor. A deed of trust must be processed by a qualified insolvency professional who will arrange meetings with your creditors, negotiate on your behalf and distribute payments accordingly. They are known as the 'Trustee' of your case.
What is the criterion?
To qualify for a Scottish Trust Deed, you must have a minimum of £ 10,000, have a full-time job, be able to pay at least £ 150 to pay your debts and be a permanent resident in Scotland.
How long does it last? The duration of Trust Deed is 36 months (3 years). After this period has expired, the creditors will cancel the remaining debt.
The facts of trust are not for everyone ...
So you have decided to study this, but keep in mind that the Scottish Trust Deeds are not for everyone. They are only meant for people who struggle to pay their debts and can not find a viable solution to their debt problems. You may have incurred too much debt, had a salary reduction or lost your job because of redundancy, all of which would be a viable reason to study this particular Debt Settlement. You can also protect your assets, such as your car or your home, from the recovery of banks.
Another important advantage is that the interest and charges are frozen, which means that the debt will not be accumulated as it probably is now where most of your monthly payment is deposited in the pocket of the banks and only a small percentage of your debts It is actually paid every month.
The disadvantages
However, there are disadvantages. Your credit rating will be affected during the 3 year period while you are in the Trust Deed program and will not recover until much later, but if you are in a serious position with your finances, you may want to get more credit after the period. It is thin as most people would want to get away from debt forever! Therefore, on that basis, you probably will not require the use of your credit rating. Your reputation will also be damaged, although this is not important for everyone. I think alleviating the stress of being in debt actually exceeds this by miles!