Trust Deed

A Trust Deed is a mechanism by which you can repay your debts over a specified period (3 years). Monthly payments are based on what you can afford and after the period of your arrangement, any remaining debts are written off. It is only appropriate where you are unable to make full monthly payments to your lenders and is a formal legally binding agreement between you and a licensed Insolvency Practitioner.

Advantages

• The pressure of being in debt is reduced as all correspondence, including any queries from lenders, is handled by the Trustee.
• No further action can be taken against you by your creditors for recovery of the money you owe them.
• Trust Deeds normally last three years, when it ends, the remaining debt is written off.
• A Trust Deed is more flexible and costs less to administer than sequestration.
• It also allows the debtor the right to hold certain public offices - which would not be the case with sequestration.
• There are no court proceedings involved.
• The information is not published (unlike sequestration).

Disadvantages

• Lenders have the right to receive any equity that you may have in your home to repay your debts.
• Any assets you have must be released.
• Your credit file is affected for 6 years.
• You must declare any unexpected windfall over £200.

The Trust Deed is one of several options available. If you are unsure which step to take to solve your debt problems, CLICK HERE to ask the opinion of our professional debt advisers. This is a totally free and confidential service.