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Ten most common reasons for trust deeds


8th Dec 2021 Insurance & Legal

Ten most common reasons for trust deeds

For the average person, the concept of trusting someone else with something that belongs to you is known as relinquishing control.

In some cases, a settler may offer the other party their assets to hold or use for the benefit of third parties without giving up ownership of those assets themselves. A Trust Deed is used for a wide range of reasons, much beyond the ten listed above. For each of these reasons, we've included an explanation of what it means to a person in that particular situation.

One low-cost monthly payment

Many people find it difficult to keep up with many monthly payments to a variety of creditors, which often total an unacceptable sum.

You may be unable to pay off your overdraft each month and/or be subjected to ongoing bank fees, or you may simply feel overwhelmed by your financial obligations.

With Trust Deed Scotland, you can consolidate all of your debt payments into a single, manageable monthly payment that is then disbursed to your creditors.

 Reduce your debt by a certain amount

As long as you meet the requirements of your trust agreement in full, any leftover debt will be cancelled. As an example, if you owed £15,300 and you agreed to pay £150 a month for 48 months, you would pay back £7,200 and the rest £8,100 would be written off.

Protects your house

A form 1B will be completed prior to the trust deed being agreed upon, which will determine the worth of your home at the time of the trust deed's inception and determine whether or not your home is qualified for insurance cover.

Quickly pay off your debts

After completing a Trust Deed, which normally lasts for 48 months, you will be debt-free. Other debt solutions, such as the Debt Arrangement Scheme (DAS), which can continue up to 10 years, or a Debt Management Plan, which can last indefinitely until your debts are paid off, endure longer.

Stop paying creditors

Your creditors will no longer be able to contact you in any way to try to collect on your debts once your Trust Deed is in place. Trust Deed Scotland can help you write off some of your debt and become debt-free by using the Trust Deed Wizard.

Sequestration alternatives

Once your Trust Deed terms have been finished, unlike with Sequestration, your debts will be marked as satisfied, which is seen more favourably on your credit report than bankruptcy. Trust Deeds are subject to government regulations that ensure you have enough money each month to satisfy your necessities and pay your monthly contributions.

Sequestration and the Minimal Asset Process have stricter rules.

Helps you relieve stress

Stress and sleepless nights are understandable consequences of being in debt. With a Trust Deed, you can see the end of the tunnel because the procedure is well-defined and has a predetermined outcome.

After meeting your Trust Deed terms, you will be debt-free as long as you pay the agreed-upon monthly payment.

 Allows wage arrests to be lifted

It would be impossible for your creditors to take further court action against you if your Trust Deed was protected, as any wage arrestments already in place would be discharged. Using a Trust Deed or a Debt Payment Program prevents a lawsuit from being brought.

Abolishes interest and fees

When you file for bankruptcy, all interest and charges on your debts will be frozen, so you won't only be paying off the interest but not clearing any of your debt.

Restore your credit history gradually

As soon as the terms of your Trust Deed have been fulfilled, you can begin the process of rebuilding your credit.

Upon reaching the age of 18, you will be able to apply for credit in the same manner as you would if you were 18. You can gradually improve your credit rating and become eligible for mortgages and other crucial forms of credit through careful borrowing.

Depending on their disposable income, the debt amount, and the identity of their creditors, each person's contribution will be different. Trust Deed Scotland cases have been used as a basis for these data.

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