What is the role of the Trustee in a Trust Deed?

What does the Trustee do when you enter into a Trust Deed?

If you’re struggling with unmanageable debt problems in Scotland, a Trust Deed can provide a route towards a brighter future. One of the key parts of a Trust Deed is the appointed Trustee who will be part of your Trust Deed from day one. Understanding their role is crucial, as the Trustee will be central to managing your Trust Deed from start to finish.

Who is the Trustee in a Trust Deed?

A Trustee is a licensed insolvency practitioner (IP) who is authorised to set up and manage Trust Deeds in Scotland. They act as an impartial third party between you (the debtor) and your creditors (the people or companies you owe money to).

While the Trustee is appointed by you, their role is to treat both sides fairly. This means ensuring that you can repay what you can afford towards your debts, while also protecting the rights of your creditors and maximising their returns as much as possible.

The Trustee plays a vital role in ensuring that your Trust Deed runs smoothly. Without them, it would be impossible to manage the legal and financial complexities involved.

4. Managing your monthly payments

As part of the Trust Deed, you will make one affordable monthly payment towards your debts directly to the Trustee. It is then the Trustee’s job to distribute these funds fairly among your creditors on a pre-agreed proportional basis.

5. Protecting you from legal action

So long as your Trust Deed becomes “protected”, your creditors are legally bound by its terms. This means they cannot take further legal action against you to recover the money you owe, nor can they contact you and ask you to pay more towards your debts than the amount agreed as part of the Trust Deed. It is the Trustee’s job to ensure these protections are enforced; if you receive communication from your creditors during the term of your Trust Deed, you should refer this to your Trustee who will respond on your behalf.

6. Managing your assets

In some cases, your Trustee may need to consider your assets (such as savings, your home or other property). They’ll assess whether assets need to be sold or if equity can be released in order to distribute the proceeds to your creditors. Again, the Trustee will always aim to strike a fair balance between your financial stability and creditor repayment.

7. Supervising and ongoing monitoring of the Trust Deed

Throughout the duration of the Trust Deed, the Trustee will check in with you to ensure your circumstances haven’t changed. If your income rises or falls, you must tell your Trustee at the earliest possible opportunity as your contributions may need be reviewed to accommodate for your new circumstances.

8. Completing the Trust Deed

Once you have successfully made all payments, the Trustee ensures the Trust Deed is closed properly. At this point, any remaining unsecured debts included in the Trust Deed are legally written off.

How to find a Trustee to manage your Trust Deed

As your Trustee will be managing your Trust Deed for several years, it’s important to choose someone you trust and feel comfortable with. At Scotland Debt Solutions, our licensed insolvency practitioners have decades of experience helping individuals across Scotland enter Trust Deeds and manage the process with care and professionalism, and we are here to help you too.

How Scotland Debt Solutions can help

If you’re considering a Trust Deed and want to learn more about how a Trustee could help in your specific situation, contact Scotland Debt Solutions today for free, confidential advice.