How do Protected Trust Deeds work?
March 8, 2013
As households are faced with increasing financial pressures, many are turning to debt solutions in order to stay afloat. In the financial year 2011/12 alone, just over 9,000 Protected Trust Deeds were granted in Scotland.
A Protected Trust Deed is an option for residents in Scotland who are struggling to pay unsecured debts. If you want to pay back your debt, but simply need a more manageable, realistic payment plan, then a Protected Trust Deed may work for you.
A Trust Deed is a contract that legally binds you and your credit providers, allowing you to make manageable payments for an agreed time period without entering bankruptcy (or sequestration as it is referred to in Scotland). Any unsecured debt included in the Protected Trust Deed that remains after the agreement is successfully completed is then written off.
As with may other debt solutions, once the Trust Deed becomes protected, you are protected from any further legal action being taken against you, providing you obey the terms and conditions set out. The payment itself goes to an IP (insolvency practitioner) who then distributes payments to the lenders, meaning no more relentless debtors chasing you for money. Creditors do have the option to object to a Protected Trust Deed, details of which can be fully explained by one of our experienced advisers at Scotland Debt Solutions.
In most cases, the agreement period lasts around three years. However, it is important to remember that a Protected Trust Deed is still a form of insolvency, and your credit rating could be affected for up to six years.
As with many debt solutions, a Trust Deed may or may not be the best option for your situation. Speak to one of our qualified debt advisers today for impartial advice on the best solution to gain control of your debts.
Often, when debt begins to spiral out of control, the first concern for homeowners is whether they will have to sell their home. With a Protected Trust Deed, you may be required to release equity from your property to pay off some of your unsecured debt; however it is unlikely that you would be forced to sell your home.
For more information or to apply for a Protected Trust Deed, why not contact Scotland Debt Solutions today, where our friendly, knowledgeable consultants can offer you expert advice and help you find the best option to get your finances back on track.
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