When choosing a debt solution there is so much information online that it can become a little overwhelming. It only makes matters worse when some information is either biased or incorrect. At trustdeedcalculator.co.uk we know that only honest, open, unbiased advice will make the difference in helping you decide on the best debt solution for you.
Our team was built to handle Protected Trust Deeds – the debt solution in Scotland which fills the role of an Individual Voluntary Arrangement in England, Wales and Northern Ireland. A Protected Trust Deed is designed to help any individual struggling to pay debt of over £5,000. It applies to Scottish residents who have been living in the country for at least six months. Those who are successful in applying for a Protected Trust Deed agree, alongside their Trustee, to make affordable monthly payments to creditors to reduce their overall debt. Usually a Protected Trust Deed will last four years, although this can be extended depending on personal and financial circumstances.
We realise that there are a lot of debt advice websites, all with varying information on the both the advantages and disadvantages of a Protected Trust Deed, so before applying for a debt solution, it is worth listening to the experts as we dispel any myths around that particular solution. This will only make selecting the right option for you a lot easier.
1. A Protected Trust Deed is more or less the same as Sequestration.
Sequestration is very different to a Protected Trust Deed. The most important difference applies to homeowners in that with a Protected Trust Deed, provided you keep up with mortgage payments, you will not need to sell your home. With sequestration all of your assets are handed over to your Trustee. If they think it is necessary to release any of your assets in order to make payments to creditors, they are within their right to do so.
2. I can’t get a Protected Trust Deed if I already have a wage arrestment in place.
Once a Protected Trust Deed comes into force, any wage arrestment is removed in order to allow you to make the agreed monthly payment. However it is worth remembering that if you do not meet payments without a valid explanation, your Trustee is able to reinstate a wage arrestment at any time.
3. It is more difficult to apply for a Protected Trust Deed if I am self-employed.
Applying for a Protected Trust Deed is no more difficult for those who are self-employed than those who aren’t. However, if you are self-employed you must provide accounts, invoices and evidence of income.
4. Protected Trust Deeds take a long time to set up.
Once you have applied for a Protected Trust Deed, your creditors have five weeks to agree to the monthly payments outlined in your Trust Deed. This will be the only real waiting process that is enforced during the process of setting up a Trust Deed. So long as you provide sufficient information for your Trustee in good time, there will be no further delay in getting your finances back on track.
5. My details will end up in the newspaper after applying for a Protected Trust Deed.
With a Protected Trust Deed your details will not be published in any newspaper. They will, however, appear on the Accountant in Bankruptcy (AIB) register – which can be accessed by anyone. Your details won’t be removed from the register until two years after you are discharged from the Trust Deed.
6. I won’t be able to apply for a Protected Trust Deed if I am a homeowner.
You can apply for a Trust Deed whether you live with your parents, you’re a council tenant, private tenant or a homeowner. The fact that you are homeowner will neither affect the outcome of an application nor the speed at which it is processed.
7. There are a number of unsecured debts which you are unable to include in a Protected Trust Deed.
The only unsecured debt that cannot be included in a Protected Trust Deed is student loan. All other unsecured debts, credit card bills, medical bills, store card bills and similar debts can be included in the Protected Trust Deed. Your Trustee must be made aware of all unsecured debt before making any application for a Protected Trust Deed.
8. Once I have a Protected Trust Deed my credit rating will suffer?
Having a Protected Trust Deed will affect your credit rating. Although it is important to remember that if you are applying for Protected Trust Deed, or any alternative debt solution, this is likely because you have been missing payments. Your credit rating, therefore, will already be affected. In the long run your credit rating will appear better after clearing your debt through a Trust Deed than without applying for a Trust Deed at all.
9. I won’t appear employable with a Protected Trust Deed.
For the vast majority of professions, having a Protected Trust Deed is not an issue. However, if you have a job where there is a position of trust with regards to the handling of money then having a Protected Trust Deed could be an issue. Bodies who represent accountants or solicitors, for example, will be concerned about individuals using Trust Deeds. This is because you could be perceived as vulnerable to blackmail or corruption. If you apply to the Prison Service, the Fire Service or the Police whilst under a Trust Deed it is likely that you will go through a strict vetting process. Your application will be viewed differently to that of someone without a Trust Deed.
10. If I come into money during the period under the Protected Trust Deed, my monthly payments won’t have to increase.
Generally, if you receive some kind of windfall then this has to be used towards paying your creditors. This could include inheritance, a lottery win or, in some cases, redundancy payments. Whether your financial circumstances improve or worsen, it is vital to communicate this to your Trustee. Any change in financial circumstances should be reflected in your monthly payments throughout the Trust Deed period.
Finding the right debt solution for you can seem like an arduous process. With so many debt advice websites it can be difficult to know which information is correct and unbiased towards any particular service provider. At trustdeedcalculator.co.uk we provide open, honest advice on Protected Trust Deeds in Scotland. We ensure the information we give to clients dispels any myths about Protected Trust Deeds, allowing you to go forward with clearing your debt with as much knowledge as possible.