The basic idea behind getting you the trust deeds was to ensure that you could pay off your debts in a protected environment. The Scottish Trust deeds are protected as they are a legal binding agreement between the debtor and the creditor to ensure that by the end of the term, the debtor will be completely debt-free and will not owe anything whatsoever to the creditor anymore. Getting such kind of legal protection may affect your credit rating, but if you are really in a difficult situation and you cannot handle so many creditors any longer, you must consider availing the trust deeds as soon as possible.
Here the few steps which you should consider while on the road to availing protected Scottish trust deeds:
- Consult with the Insolvency Practitioner. Have a proper discussion with them regarding your current financial circumstance. Ultimately they will be the medium between you and your debtors. Also, be honest with them so that they can chalk out a realistic budget for you. This way your debt payments will be affordable and less strenuous. Since the one single monthly payment will be paid off to all the creditors, it will form the basis of your trust deed. If you have any further queries, discuss it with your insolvency practitioner.
- Once agreed, you will be asked to sign the trust deed, once you do that, your creditors will be notified. Don’t worry; your insolvency practitioner or trustee will take care of this part. This part will be the proposal, whereby your creditors will be notified of the amounts that you wish to pay and how much each creditor can expect to get within the stipulated time. The creditors can then accept or reject your proposal within five weeks from the delivered time. If one third of your creditors have accepted the proposal, then your deed receives a protected status. However, if they do not respond at all, then it is considered accepted by default.
- Once your deed gets the protected status, you will be fully protected under the terms of the deed and your creditors will be prohibited from taking any legal actions against you. The level of equities you possess, are discussed with you during step 1. If your house has a lot of equities, all or at least some part of it will have to be released to your trustee to pay to the creditors. However, how you wish to release those equities is up to you. Your trustee or the insolvency practitioner will discuss with you on the ways you want to release your equities. Of course, each situation is different, but it is highly unlikely that your insolvency practitioner will force you to give them your equity.
- All the payments can be made within 3 years, but mostly it takes somewhere between 3 to 4 years to pay off the debts completely. Even if they are not paid off completely after 4 years, your remaining debt is written off by a discharge letter that confirms this. After this takes place, your creditors can never approach you for the balance amounts which were due.