Trust Deed- Pros and cons...

Trust Deed’s are form of insolvency. They are legally binding and it important to understand all the implications before entering into one. Once you are in an agreement you have to stick to the repayment terms to become debt free in 36 months.

Below is a comprehensive list of pros and cons surrounding Scottish Trust Deeds;

Pros;

Eliminates creditor hassle
Part of the terms and conditions of an Trust Deed are that creditors are LEGALLY NOT ALLOWED to contact you, at all during the 36 month period.

Write off up to 75% of your debts
Trust Deed’s allow you to completely write off up to 90% of what you cannot afford to repay. Meaning if you owe £50,000 you could end up repaying only £5,000!

Freezes interest and charges
All interest and charges are completely frozen during the 5 year period meaning your debts will not increase.

Debt Free in 36 months!
You will be completely free from debt in 36 months

Piece of mind
You can sleep at night know your financial situation is now back on track and in 36 months time you will be debt free.

Cons;

Formal Arrangement
A Trust Deed is a formal arrangement between you and your creditors, meaning that it can be difficult to change once all the new arrangements are in place, unlike a Debt Management Plan which is an informal arrangement.

Only for the Scottish
To qualify for a Trust Deed you have to have been a resident there for at least 6 months

It is advertised in the Edinburgh Gazette
All Trust Deeds are advertised in the small print in the Edinburgh Gazette

No further credit
You are strictly not permitted to take out any further credit throughout the duration of the plan

Affects your credit rating
A Trust Deed, like any debt solution, will inevitably affect your credit rating to some degree. Once the 36 month period is over you credit rating will begin to improve.

If you need more information on repairing your credit rating, there are a number of steps you can take which will improve your credit score. Click here for more details.