Trust Deeds
A number of solutions exist for individuals with financial difficulties. None, however, offer the flexibility, affordability and protection from the creditors, coupled with the freezing of ongoing interest, that a Protected Trust Deed provides.
Who can sign a Trust Deed?
Any individual or partnership based in Scotland with personal or business debts can sign a Trust Deed
The effects of signing a Trust Deed
By signing a Trust Deed you are transferring control of your assets (normal household item are excluded) to your Trustee. How this affects you, of course, depends on your individual circumstances. Assets which are likely to be included in the Trust Deed are any equity in your home, cars, investments or any other significant assets. Further explanation of how these items will be dealt with are set out below.
The Trust Deed will be in force for an agreed period, generally three years, at the end of which the funds available will be paid to your creditors. Any remaining debt due to your creditors over and above the payment made will be written off. At this point, you will not be required to make any further payment in respect of debts incurred prior to signing the Trust Deed.
Peace of Mind
Before you sign a Trust Deed, Our staff will advise you on the various options that exist to deal with your assets and will explain the effects signing a Trust Deed will have on your finances. An agreement will need to be reached as to how any value in your assets will be realised, and these arrangements will be confirmed in writing.
Your Home
The only interest the Trustee is likelt to have in your home is in respect of any "equity" available. A valuation of the property will be carried out and the level of any outstanding mortgage or secured loans established. The difference between the value of the property and the outstanding debts secured on the property wll be calculated and the arrangements must be made for this sum to be paid to your Trustee. This can be done by re-mortgaging, payment being made from a third party (oftem a family member) or additional payments being made at the end of the Trust Deed term. If necessary, we can arrange an introduction to an Independent Financial Advisor who will provide your with advice on how best to deal with your equity in order to suit your circumstances.
How Much Will You Have to Pay ?
The proposals made to your creditors will usually include the potential realisations from any assets and an agreed contribution from your future income. If you have no assets, a Trust Deed can proceed on the basis of a regular contribution from your future income only. The Proposals made will be structured in order to best suit your personal circumstances. The purpose of the Trust Deed is to allow you to regulate your finances and achieve the best possible outcome for your creditors.
Car
The Trustee's interest will onyl be in any equity which exists in the car. If the car is subject to hire purchase, only the differencebetween the valu of the car and the outstanding hire purchase will be required to be contributed to the Trust Deed. If your car is needed for travel to and from work, you will normally be allowed to retain the car and to continue to make payments to the hire purchase company.
Advantages of Signing a Trust Deed
- Pressure from creditors is removed.
- All correspondence and queries from creditors will be dealt with by the Trustee.
- You can agree the proposal which will be put to creditors with your Trustee, therefore retaining a degree on control over your finances.
- A Trust Deed is less costly than sequestration, and should result in a better outcome from your creditors.
Disadvantages of a Trust Deed
- Any existing wage arrestments or other diligence may continue to be effective. It is therefore important to fully disclose any actions that may already have been taken against you in order that the appropriate arrangements can be made for these to be released if possible. At worst, the effects of these procedures need to be taken into account when deciding if a Trust Deed is the right solution for you.
- If you are self employed, there are may be some restrictions on your ability to trade. Alternative arrangements may, however, be available to allow trading to continue in order to generate future income.
Why Financial Helpline ?
The Financial Helpline uses leading chartered accountants with 36 offices throughout the UK. As well as providing full and constructive advice to companies and individuals with financial difficulties, we offer a full range of audit, accounting and taxation services.
Our object is to solve your financial difficulties and allow you to regulate your finances as soon as possible. We have no charge for any initial consultation or information on what we offer you. Call us on 0800 389 6339 or fill in the call back box for further information.
