Sharon McDougall - Updated - 25th January 2024 - 2 minutes to read
Scottish Trust Deeds are an effective way to escape debt if repayments become unmanageable. Personal circumstances can change very rapidly and even if you only owe a relatively small amount, unsecured debts can increase significantly due to the high interest rates and charges applied.
If you’re eligible for a Trust Deed, and it’s deemed to be your best option, it will allow you to repay a proportion of your overall debt, usually over four years. What happens if you have joint debt, however, or your partner is also experiencing high levels of unaffordable debt?
Joint Trust Deeds don’t exist, as these debt mechanisms are designed to be used by individuals. There are ways you can run a Trust Deed that encompasses debts as a couple, however – in other words, two individual Trust Deeds that run side by side.
This enables you to pay off your debts roughly at the same time, but there are some key issues surrounding liability for your partner’s debts that need to be mentioned. Essentially, you’re only liable for another person’s debts if the borrowing was taken out in joint names, or you are a guarantor for their loan.
Joint debts are typically taken out on a ‘joint and several liability’ basis, which means that the lender can pursue both or either of you for repayment of the entire amount. If you want to pursue the possibility of taking out individual Trust Deeds that run alongside each other, you should seek reliable and independent insolvency advice from a professional.
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Running individual Trust Deeds side by side
Although a joint Trust Deed doesn’t technically exist, there may be a way to run two individual Trust Deeds alongside each other. This would involve you both taking professional advice to tackle your debts, and enabling a licensed insolvency practitioner (IP) to determine whether it’s a viable option.
Your IP may advise that the best way forward is for you or your partner to enter a different debt solution, such as a Debt Payment Plan (DPP), or to tackle your debts in a different way. Perhaps you owe or earn more than your partner, for instance, or one of you owns property in their sole name.
A significant advantage of a Scottish Trust Deed, and other debt solutions, is the flexibility they offer if you or your partner’s circumstances change. If you separated or lost your jobs, for example, it may be possible to renegotiate lower repayments or an extended term.
Your adviser will take various factors into account and conduct a thorough assessment of your financial situation to make sure you take the right steps to pay off your debts. They may recommend an alternative, such as the Debt Arrangement Scheme (DAS).
Sequestration may also be an option, which although drastic, can leave people free of debt and able to start again financially within 12 months. It’s vital to seek early professional debt advice if you’re struggling to repay, however, and Scotland Debt Solutions can help.
We’re debt specialists and can offer you a same‐day meeting free‐of‐charge. We operate offices around Scotland and can quickly establish your best options.
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Sequestration is the Scottish version of bankruptcy and may be suitable for you if you do not have the money to pay back your debtsFind out More
A Trust Deed involves making a monthly contribution to your debts for up to four years. After this time any remaining debt included in the Trust Deed will not need to be paid.Find out More
A Debt Arrangement Scheme (DAS) lets you pay off your debt through a series of manageable instalments over a reasonable length of time.Find out More
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