What debts can I include in a trust deed?

When it comes to debt, there are two main types which you may be dealing with: secured and unsecured. You may have debts which fall in to either or both of these categories. As each class of debt is viewed differently it is important to know the difference between secured and unsecured borrowing before deciding which debt solution is right for you.

Secured v Unsecured debts - what's the difference?

Secured debts are those which are tied to a specific asset, typically property or vehicles. In the event of you being unable to keep up with the agreed monthly repayments, the lender can seize this asset and sell it in order to recoup the money they are owed. Unsecured debts, however, are not underpinned by anything other than a promise by the borrower to repay the money which has been lent. Should you default on an unsecured loan the lending company is allowed to chase you for payment, however, as they do not have the security of an asset they cannot remove your possessions without first going through the court.

How to manage secured loans when in a trust deed?

Even though you will need to continue to service any secured borrowing, the good news is that your contractual monthly payments on these secured loans will be taken into account by the trustee when drawing up your proposed agreement. This means that the amount you have left over to pay into your trust deed will be reduced to reflect these secured loan payments. With this in mind, however, in order to be eligible for a trust deed you must have some money with which to pay the creditors included in the arrangement. If you do not have any money left over after paying your necessary bills and secured debts, then you will not be able to enter into a trust deed and instead you will have to consider an alternative debt solution such as sequestration.

How Scotland Debt Solutions can help

Knowing which debt solution is the right one for you and your circumstances can be difficult. It is therefore vital that you seek expert help and advice from a professional to ensure you make the best decision possible. Scotland Debt Solutions have been helping Scots manage their debt problems for almost 30 years and are perfectly placed to help you too. 

By taking out a trust deed with Scotland Debt Solutions, we can help stop the phone calls and letters from those you owe money to. We will take responsibility for liaising with your creditors and letting them you that you have entered into a Trust Deed, and that all further communication must go through us.  Call our advisers today on 0800 063 9250 to arrange an appointment with our debt experts.