The end of your Trust Deed will be marked with a formal discharge letter from the Trustee, and your entry on the Register of Insolvencies will be removed. If your property has been earmarked for inclusion within the Trust Deed, you may need to pay a lump sum to fulfil the final terms, however.
Trust Deeds generally come to an end after three or four years. Any remaining unsecured debt included in the agreement will be written off, and your creditors will not be able to pursue you for these amounts.
The end of a Trust Deed usually brings with it a sense of achievement and liberation for debtors. But what can you do in practice to make sure that it does not affect you for any longer than is necessary?
One of the effects of entering formal insolvency is the damage done to your credit rating. The Trust Deed will be marked on your credit file for a total of six years from the starting date, and you need to make sure that the credit reference agencies have notification that your Trust Deed has completed, so that they can mark your file accordingly.
This will happen automatically in most cases, but it is worthwhile checking your credit file with each of the three main agencies regularly – Experian, Equifax and CallCredit. If it has not been updated within three months of the end of your Trust Deed, you are entitled to ask your creditors in writing to make the notification.
During the course of your Trust Deed, you would not have been eligible to borrow money, and one of the downsides of entering formal insolvency in this way, is that your credit rating is damaged for some time.
You may be offered some borrowing, but you will notice that the interest rates are much higher than for ‘standard’ loans. There are ways of rebuilding your rating, however, and it pays to be proactive in doing so.
This is a logical way to start a plan for savings. Having successfully managed your income and outgoings for the term of the Trust Deed, you will be used to living on a reduced amount each month.
This seems like the ideal opportunity to save either part of the amount paid to your Trust Deed, or all of it if possible. This will set you up for a solid financial future, and provide a nest egg that allows you to avoid credit card debt or other types of borrowing.
At Scotland Debt Solutions, we provide professional advice and support to Scottish residents experiencing financial difficulties. If you contact one of our team, we can arrange an initial meeting free-of-charge at various locations throughout Scotland.
The Register of Insolvencies is a public register that documents Trust Deeds until five years after the discharge date and includes personal details.
Joint Trust Deeds don’t exist, however, if you want to run a Trust Deed that encompasses debts as a couple, this will be two individual Trust Deeds.
Our Scottish based team can help advise you on your debt problems.