Protected Trust Deed - Frequently Asked Questions (FAQ)

Trust Deed FAQ’s

Click to reveal frequently asked questions on a trust deed.

Trust Deed Frequently Asked Questions

 

How much debt do you need to enter a Trust Deed

Typically anybody with £5,000 or more of unsecured debt could be applicable for a trust deed in Scotland. 

How much are my monthly payments to a Trust Deed?

The Protected Trust Deed payment each month will be an affordable payment towards your debt. It’s calculated based on your income and expenditure and what you can reasonably afford.

How long does a Trust Deed last for?

A trust deed can last up to 5 years but can be as short as 6 months (full and final/ equity trust deed). Usually a trust deed will last for 4 years. 

I have PPI that I am claiming do I have to tell the company managing my debt?

Yes. Any income you receive from mis-sold Payment Protection Insurance must be included within a trust deed. If you are currently applying for PPI and expect to receive more income than you have debt, then it’s advisable to avoid entering a trust deed.

How much of my debt will a trust deed write off?

One of the benefits of a trust deed is that you repay what you can reasonably afford. This means at the end of the solution any debt which isn’t repaid is written off. The trust deed will write off all the debt you can’t afford to repay.

Will my friends and family know that I have entered a trust deed?

Everybody entering a trust deed is listed on the Register of Insolvencies, maintained by the Accountant in Bankruptcy.

Can entering a trust deed affect my employment?

The vast majority of people entering a trust deed don’t have to worry about their job. In some instances, entering a trust deed can affect employment. If you’re worried about your job, please review your contract of employment or speak to your HR manager.

I own a property can they ask me to sell it in a PTD?

Your property will be discussed at great length. It’s rare for a property to be sold in a trust deed but it depends on the equity. Usually there will be a remortgage if there’s equity or payment from a third party. If there’s little, or no equity, then the property is definitely safe and you can keep this.

I don’t have to disclose my entire income do I?

Yes. It’s vital you are honest and transparent when it comes to income, expenditure, debts and assets. This way you can be sure you’re getting the right advice at all times.

In a trust deed you must pay a monthly payment towards your debts. If you don’t have any disposable income each month then a trust deed would not be suitable.

My wages have been arrested will this stop when I enter the trust deed?

Usually a wages arrestment will be lifted once you enter a trust deed.

I have joint debt with my ex will half the debts still go to him?

No, unfortunately each party is liable for the full amount with joint debt.

My partner is unaware of the situation, will they find out if I enter a Trust deed?

If you have any joint debts with a partner, or joint assets, then your partner could find out. For help to understand if your partner will be aware, please speak to Debt Support Trust on 0800 085 0226.

Will I be able to keep my car if I enter a PTD, it is worth £5,000?

Your car will be valued at the end of the trust deed. If your car has equity worth £3,000 or more then you could be asked to downsize. If there is outstanding finance on the car, then this would betaken into account. Usually people are able to keep their car.

How long does it take to get into a PTD?

Usually a trust deed takes a total of 7 – 10 weeks from start to finish to propose, however this can vary depending on circumstances.

I have an insurance policy would they need to know about it?

An insurance policy is acceptable in a trust deed. Life and homes insurance is accepted as necessary expenditure, as long as it’s within the limits. Health insurance is not permitted.

My parents are elderly if anything happened to them and I inherited money would I need to tell them?

Yes, any inheritance or windfall received during the trust deed would need to be included and returned to the creditors. If the windfall exceeded the debt and fees then the rest of the money would be returned to you.

Would sequestration not be the better option as I don’t think I would need to pay anything to that?

There are two routes to enter sequestration / bankruptcy in Scotland; the MAP and certificate of sequestration. If you are applicable for a MAP it’s not advisable to enter a trust deed. If you’re not sure, give our charity advisors a call on 0800 085 0226.

I live in England do I qualify for a protected trust deed?

No, only people residing in Scotland can enter a trust deed, but you could be applicable for iva debt advice.

I am in trust deed and I am struggling to make the monthly payments is there any way I can reduce the payments?

If making the repayments is proving tough, speak to your trust deed company and explain that you’re struggling. Your trust deed company could help you pay a more affordable amount.

I have been made bankrupt can I come out of that and enter into a Protected Trust Deed?

Once you have entered bankruptcy you cannot switch to a trust deed.

I have a high expenditure because I am on a special diet and my food bills are high will they accept this?

Yes, if your doctor has recommended a special diet because of your health then as long as you can evidence this (usually a medical letter will be sufficient) then your expenditure will often be accepted by the creditors.

I am in a trust deed, am I able to take out another credit card?

Taking out credit whilst in a trust deed is not recommended. You are not allowed to borrow credit over £500.

I did not know I owed money until recently and I have not heard anything from the creditors for years can they still legally chase me for this debt?

It’s best to talk to a debt advice professional. Your debt may be classed as statute barred, meaning the debt is not enforceable.

The debt is affecting my health and I suffer with depression is there any way the creditors will stop chasing me for the debt if they know its making me ill?

Your creditors are allowed to ask for their money back but if you feel you’re being harassed then you can request correspondence via letter only. If you need help with this please contact Debt Support Trust.