Debt Help Scotland with a Scottish Trust Deed

As unemployment rates rocket, more and more people are finding that they are unable to meet their monthly financial commitments. Therefore, and as time progress's, interest on outstanding debts accumulates. Often, debtors will avoid answering the telephone, or opening the door to callers, in the event that they are met by creditors demanding payment. Sometimes feeling threatened, debtors will often pay the most persistent creditors, and debts that should take priority, such as rent and council tax, will be left unpaid. Consequently, outstanding debts can spiral out of control leaving the debtor, in what might feel like, an impossible situation.

Obviously, this can be a very stressful time for those affected. There are a number of repayment option schemes available, to help debtors manage their credit affordably, settle outstanding debts and have a third party negotiate with creditors on their behalf. The following paragraphs offer further information, regarding a Scottish Trust Deed and debt help Scotland.

What is a Scottish Trust Deed?
A Scottish Trust Deed is a very specific, legally binding repayment agreement that should not be confused with or mistaken for, a debt management programme. There are certain eligibility criteria that have to be met before this particular option can be considered. In order to satisfy the criteria for this type of repayment arrangement, an applicant must be resident in Scotland and have high levels of debt. This option is only available for those who have unsecured debts and therefore, is not suitable for those debtors that have loans secured on property or vehicles.

What can it do for me?
A Trust Deed permits debtors who are struggling with their outstanding debts, to offer a proposal to creditors and therefore, eventually clear all debts. The process begins by offering creditors a proposal for a monthly repayment. The Trust Deed will become protected on the proviso that none of the creditors, who have a claim of more than one third of the total debt, reject the proposal. Once the deed has become protected, it is a legally binding agreement.

The Trust Deed acts to consolidate all outstanding debts into one single monthly repayment, and which normally spans a thirty six month period. This payment is given to creditors each month on a pro rata basis. The debtor is fully involved during the first draught of the proposal and the monthly repayment will reflect the debtors income, cost of living expenditure, assets and liabilities. There will be agreement therefore, that the monthly repayment is realistic, affordable and sustainable.

How do I qualify for a Trust Deed?
To enter into a Trust Deed, the debtor must have their proposal draughted by a Licensed Insolvency Practitioner. The debtor will be given the first draught for approval. This is the point at which the debtor must make any alterations that they feel may be necessary, prior to the proposal being circulated amongst creditors. If the debtor feels that the repayment is too high and therefore, not realistic, this is their opportunity to request alterations.

After the Trust Deed has been approved by the debtor, the proposal will be offered to all creditors. This is now the creditors opportunity to either reject or accept the proposal. Creditors can however, at this stage, request that modifications are made. However, any modifications can only be approved with the full consent of the debtor. If any of the creditors do not respond to the proposal, the Licensed Insolvency Practitioner can consider this non response, as an acceptance of the proposal.

What happens after the Trust Deed has been accepted?
After the arrangement has been accepted and become protected, the Licensed Insolvency Practitioner will act as a supervisor of the deed, and will ensure that all terms and conditions of the agreement are adhered to. The Licensed Insolvency Practitioner is then known as the 'Trustee'.

During the course of the arrangement, creditors can be legally prevented from contacting the debtor. All monthly payments will be collected and distributed by the 'Trustee' (Insolvency Practitioner).

How long will the arrangement last?
The term of the Trust Deed will be approximately thirty six months, at the end of which, and providing that monthly repayments have been maintained, will cease. Any outstanding amounts from the debts will be written off and the debt will be, for all legal purposes, considered as cleared in full. This is referred to as 'Composition of Debt'.

Applicants must be struggling with unsecured personal debt and be resident in Scotland, in order to meet the eligibility criteria for a Scottish Trust Deed. The debtors will be involved fully, in all aspects of negotiation and the agreement to, any proposal made to creditors. A #links# is a legally binding agreement, in which both parties, debtors and creditors, will be bound by its terms. For those wishing to obtain #links# a Scottish Trust Deed, might be the appropriate option.

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