A Trust Deed is a debt solution which allows a person to repay what they can afford to their debt and once again become debt free. This is a Scotland only debt plan and usually lasts for four years. At the end of the plan, any outstanding debts are written off legally. Trust Deeds in Edinburgh are very common for people living in Scotland’s capital city and struggling to meet their contractual payments to their credit cards, overdrafts, personal loans and catalogue debts, among others. Trust Deeds are not solely confined to Edinburgh and are a Scottish debt solution.
At Debt Support Trust our charity gives advice and support to organise a Trust Deed for people who meet the criteria. There are regions around Edinburgh that are well known for people entering a Trust Deed, like, Leith, Morningside, Musselburgh and Corstorphine.
If you want to know if a Trust Deed could help you, speak to Debt Support Trust on 0800 085 0226. All advisors at Debt Support Trust are Scottish and can advise you which debt solution is best.
Trust Deed Living in Edinburgh
As Scotland’s capital city, Edinburgh is one of the most populated cities so it’s not surprising a large percentage of people entering Trust Deed’s live in Edinburgh or the surrounding area.
If your unsecured debt is £5,000 or more then a Trust Deed could become applicable. The Trust Deed takes into account your affordability and what you can repay towards the debt each month. If you can afford to repay all of the debt in 4 years or less, then the Trust Deed would not be the best option – a DAS would be the better option.
The Trust Deed allows you to:
- Pay one affordable amount to your debt each month. You would pay one payment and stop all other repayments
- Get protection from your creditors so they can’t ask you to make the repayments
- Repay what you can afford and write off the debt, interest and charges which you can’t repay within the period of the Trust Deed.
- Become debt free in 4 years
If you live in Edinburgh and have debt problems, you can apply for a Trust Deed if you have lived in Scotland for 6 months or more and you meet the criteria. The criteria is:
- Debt of £5,000 or more
- You can make a proposal to offer your creditors a settlement of the unsecured debt, typically over 48 months
- You don’t have assets worth more than the unsecured debt
Capital City Debt Solutions
The Trust Deed in Edinburgh is just one solution which you could be applicable for. There are also debt plans like a DAS and Sequestration which you may wish to consider. At Debt Support Trust all advice is provided on a holistic basis so every option is discuss, both the pros and cons, so you can make an informed decision.
The Trust Deed would not be suitable if you owed £30,000 but had a property with equity of £100,000. In this instance, either selling the property or entering a Debt Arrangement Scheme would be the best advice.
You can get specific debt advice by talking to a debt advisor on 0800 085 0226 or completing our debt test which provides online guidance on which solution would be best.
Edinburgh Debt Help
If you would like to know if the Trust Deed would be suitable for you then here are some points to consider
- Income: Do you qualify for the MAP route to sequestration?
- Assets: Do you have stocks, shares, bonds or a house? You can usually keep your house in a Trust Deed but if you have equity then this must be realised. This can usually be managed by a remortgage or third party buyout. If there is only a little equity then we can advise you whether this would be released in a Trust Deed before you enter the solution.
- Your car: You would keep your car during the Trust Deed and at the end of the solution it’s valued to see if there’s equity. If your car is on finance then the equity is valued based on the car value, minus the outstanding finance. Any car worth less than £3,000 is excluded and you will keep it.
A good example of a Trust Deed in Edinburgh is Stephen who lives in Leith and owes £30,000 to 4 credit cards a personal loan. He can afford to repay £250 per month but his contractual payments are £650. The £400 shortfall meant he has gone without food and managed to pay the debts by further borrowing. The debts became a problem until he finally couldn’t borrow any longer.
Within the Trust Deed Stephen will pay £250 per month for 48 months, equating to £12,000. Stephen owns a car on finance and the car is worth £14,000 but the finance outstanding is £12,000. At the end of the Trust Deed he will keep his car. The mortgaged property he owns is worth £170,000 and his mortgage outstanding is £165,000. It’s unlikely he will have any realisable equity at the end of the Trust Deed so he will keep his property.