How long do Trust Deeds last?

16 April2021

If you live in Scotland and you know a bit about different approaches to debt problems, there's every chance you will have heard of Trust Deeds.

A Trust Deed is a Scottish-only insolvency solution, which is designed to work much like an IVA (Individual Voluntary Arrangement) does in other parts of the UK.

If you have significant unsecured debts that you can't afford to pay back in a time you and your lenders think is reasonable, they may agree that a Trust Deed is the best way for you to deal with your debts.

Here we'll look at how a Trust Deed works, and how long it will last.

How does a Trust Deed work?

There are different debt solutions available, which all work in different ways.

A Trust Deed could help you if you have sizeable unsecured debts that you can't pay back in a reasonable timeframe.

Once a Trust Deed is agreed, you will:

  • Have just one reduced payment to make every month, which fits around all your basic living costs
  • Stop any further action from your unsecured lenders
  • Have whatever remaining unsecured debt you can't afford to repay written off on successful completion.

It's important to note that a Trust Deed will affect your credit rating for six years from the day you enter it.

You could fill in our quick form to find out if you qualify for a Trust Deed.

I'm a homeowner. How will a Trust Deed affect me?

Unlike bankruptcy, a Trust Deed is designed to keep you in your home if you're a homeowner.

However, you may have to release some of the equity in your property to go towards your debts.

How long will a Trust Deed last?

In most cases, a Trust Deed will last for a period of three years. However, this isn't 'set in stone'.

For instance: you may be able to increase the length of your Trust Deed if your circumstances change and that means you can't afford to make your agreed payments - but you could pay just as much in total if you were allowed to do it more slowly.

You can find more facts about Trust Deeds on this page.

How could I set up a Trust Deed?

As it's a form of insolvency, a Trust Deed can only be set up with a qualified Insolvency Practitioner (IP).

The IP will be responsible for presenting your Trust Deed to your unsecured lenders, taking your interests into account as well as your lenders'.

As long as there aren't objections from more than half of your lenders - or those who, between them, hold more than a third of your unsecured debt - your Trust Deed will begin.

If you want to set up a Trust Deed, we could help you. You can apply for debt help online here.

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Tags: debt, trust deeds, Scotland, IVA, credit rating, bankruptcy, insolvency

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