Credit cards and Trust Deeds – what you need to know

Advice on overcoming Credit Card debt in Scotland

Credit card debt can be very difficult to clear, particularly if you can only afford the minimum repayment each month. The high rates of interest charged by credit card companies can make the original debt increase to such an extent that it becomes unmanageable, especially when other debts are also involved.

This is where Scottish Trust Deeds can be invaluable in helping people escape debt, and avoid bankruptcy. So what do you need to know about credit cards and Trust Deeds, and could you be eligible for this debt solution?

How do Trust Deeds help you repay credit card debt?

A Trust Deed is an official debt solution available to Scottish residents. It allows you to pay off a proportion of your credit card debt over a longer period of time, and prevents creditors included in the Trust Deed from taking legal action against you.

The term of a Trust Deed is typically 48 months, during which time interest and charges are frozen. This allows you to repay a fixed sum rather than the debt increasing each month, as normally happens when only the minimum repayment is made.

A Trust Deed can protect your major assets, such as your home, and consists of a repayment plan agreed with your creditors. It’s legally binding on all parties as long as you maintain the agreed repayments. Any credit card or other debts remaining at the end of the term can be written off, providing you with a fresh financial start.

Are there any disadvantages of repaying credit card debt with a Trust Deed?

• Your credit record will be adversely affected for at least six years, during which time it will be difficult to obtain borrowing. Being in serious credit card debt will already have been noted on your credit file, however.
• You may need to remortgage your home if there is sufficient equity to repay your creditors
• Trust Deeds are included in the Register of Insolvencies, so it will be on the public record

If you would like more information on credit cards and Trust Deeds, please get in touch with the team at Scotland Debt Solutions. We have extensive experience of helping Scottish residents to deal with credit card and other debts, and can arrange a free, same-day meeting at one of our offices in Scotland.