Insolvency can be a difficult thing to wrap your head around at the best of times – when it happens to you, the stress and confusion can pile up quickly to leave you with what appears to be
If you live in Scotland and have more than £5000 in unsecured debts, the chances are that a Protected Trust Deed is the right option for you. The quickest way of seeing if you qualify for a one of these Trust Deeds is usually through a site like Trust Deed Scotland which has an on-page Wizard which can check your eligibility. If successful, you can group all of your debts under one umbrella, paying back as much as you realistically can over a 48 month period. Once that’s done, the remainder of your debt is written off, and you’re legally declared debt free once more.
On that note, a Trust Deed will affect your credit rating. While under a Protected Trust Deed you will not be able to take out any forms of additional credit, so for the next two years your credit rating will be of little consequence. However, it is important to realise that your Trust Deed will remain on your credit file for six years from the date you sign the paperwork. If your finances are bad enough that you’re considering a Trust Deed, your credit score should be the least of your worries – you will be able to start rebuilding your credit rating as soon as you’re released from your Trust Deed.
Another question which is frequently asked is whether or not taking out a Trust Deed is the same as filing for bankruptcy (also known as sequestration in Scotland). They are not the same thing, and there are some major differences between the two – for example, a Trust Deed does not affect your living situation and you will not lose your house as a result of taking one out. The same cannot be said for bankruptcy. With this in mind, if you default on your repayments you will open yourself up to being chased by debt collectors once more. This can lead to a wage arrestment or even bankruptcy, so it is imperative that if you take out a Protected Trust Deed, you make your repayments on time every month.