Are you eligible for a Scottish Trust Deed?

A Scottish Trust Deed is a debt solution for Scottish residents. If you qualify for a Scottish Trust Deed, you would repay as much of your unsecured debt as you can afford and the rest would be written off after three years, as long as you’d done what you needed to under the terms of the Trust Deed.

However, you can only apply for a Scottish Trust Deed if you’re a Scottish resident and you are already struggling to repay unsecured debts such as:

• credit cards
• store cards
• overdraft
• personal loans.

If you’re struggling to repay your mortgage, a Scottish Trust Deed wouldn’t be able to directly help you – or ‘write off’ part of your mortgage. In fact, you may be asked to release equity in your home on a Trust Deed. However, a Trust Deed should make your mortgage more affordable, since you’d be making lower monthly payments towards your unsecured debts. Find out how this could work at DebtAdviceNow.co.uk.

Qualifying for a Protected Trust Deed

A Protected Trust Deed is legally binding. It protects you from legal action from your unsecured lenders. As long as you keep making your payments, they cannot try to make you bankrupt.

You wouldn’t qualify for a Protected Trust Deed if over half of your unsecured lenders – or lenders who collectively account for more than a third of your unsecured debt – object to the terms laid down in your Trust Deed proposal, which lays down how your IP (Insolvency Practitioner) thinks it ought to work out.

Living on a Scottish Trust Deed

While you’re on a Trust Deed, your available income goes on the debt repayments. The precise amount depends on your income and living expenses: you are expected to pay as much as you can afford. You may find it difficult to borrow money shortly after a Trust Deed because it remains on your credit history for six years.

At the end, if you successfully complete the Trust Deed, your lenders would write off your outstanding unsecured debt.