Are you struggling with debt? You’re not alone - millions of Brits are currently living with sizeable debts, with the average household owing some £13,000. However, there comes a point when the amount you owe becomes simply unmanageable. If you find yourself in this situation, then life suddenly becomes extremely stressful, as you wonder how you are ever going to keep up with your repayments. Many do so by paying one credit card off with another, which quickly causes your total debt to spiral into an even worse problem.
At some point, though, enough is enough. You will have to take action to get out of this situation- and a trust deed is an excellent way of doing just that.
Bankruptcy is always an option, but this should only ever be a last resort. Plenty of people declare themselves bankrupt simply because they don’t know that they have other choices. On the other hand, if you speak to a professional financial advisor, they will be able to help you make the right choice. If you live in Scotland, then it may well be the case that they recommend you set up a trust deed, to limit your repayments to only what you can afford.
Where to Start With Trust Deeds
How does a trust deed work? Well, it’s important to note that trust deeds are only voluntary agreements with your creditors. Your official trustee will put together a document that proposes an alternate payment scheme, and outlines how much each creditor can expect to receive over the term of the trust deed. They aren’t obliged to accept, but so long as they do (or at least don’t object within five weeks), then your trust deed will achieve protected status. From this point on, your creditors are prohibited from contacting you, and all communication must be done through your official trustee. They can also no longer take any legal action against you, so you won’t have to worry about any bailiffs knocking at your door either.
Who Can Apply for a Trust Deed?
As we mentioned earlier, trust deeds are only available to people living in Scotland. You also need to have at least £5,000 worth of unsecured debt, and have reached what’s called insolvency, which means you’re unable to pay back the full amount due to your current financial circumstances. However, if you meet all of these conditions, then it’s well worth looking into setting up a trust deed. All your debt will be frozen, which means no increasing interest continually adding to the amount you owe. Unlike bankruptcy, it also usually protects assets like your home and car, so you will rarely have to sell these to repay any of your debts. That makes a trust deed the ideal choice for homeowners struggling with debt.
As you can see, then, trust deeds are a great way of hitting the reset button on your debts, so to speak. Instead of stressing over how you are going to afford to keep up with your repayments, you can turn all of your existing debts into a single, more realistic payment, and wipe off the rest. Don’t let unmanageable debt ruin your life- instead, it’s time to change your situation for the better!