Introduction
Personal debt in the uk is at an all time high and in this article we will discuss one of the debt solutions available to people with debt problems. We will offer both the positives and negatives of this debt solution as well as the criteria.

Trust Deed Overview
Trust Deed is a Scottish debt solution which was introduced as an alternative to sequestration (the Scottish form of bankruptcy). A trust deed is a legally binding debt solution which will let a debtor pay back a proportion of the money they owe. A trust deed typically lasts for 3 years and the person in debt will make monthly payments over the term of the trust deed until it’s completed.

This solution is similar to an IVA which is only available in England, Ireland and Wales.

Criteria
To be suitable for a trust deed a person must meet the following criteria;


Your unsecured debt must be £10,000 or over
Must be able to make a monthly contribution to your debts of at least £125
You must be in full time employment
You must be able to repay at least 10% of the money borrowed over the course of the solution to your creditors
Postives
There is a number of positives with a trust deed which are ;

You only make one one monthly payment
Your interest and charges will be frozen
You will not have to speak to your creditors- the insolvency company will do this on your behalf
Once a Trust Deed is signed both you and your creditors are legally bound by the agreement, which means if you complete the agreement you will be debt free having only repaid a proportion of the money borrowed
Negatives
While there is positives to a Trust Deed there is also a number of negatives which are important to know.

A Protected Trust Deed could affect your credit rating
If there is any available equity i.e property, then this may have to be included in the trust deed proposal
Normally a person can’t be a director of a limited company
credit rating will likely be adversely affected
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