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Trust deed debt advice process

By Edited Jan 22, 2016 0 0

When exploring debt resolution options debtors quickly realise that there's a large selection. It is common for debtors to find it problematic; trying to comprehend the differences between each option. It can be extremely stressful making a choice especially since many want to put something in place as fast as possible, however, taking some time to assess the positives and negatives of each option will benefit you in the long term.

Appreciating the debt advice procedure is essential for anybody looking to enter into a Scottish trust deed. Even though some of the details featured in this article may be like alternative debt resolution choices we are only concentrating on trust deeds; appropriate solely to individuals living in Scotland.

One of the initial things a Scottish trust deed practitioner will enquire about is the complete amount of unsecured debt. Not many trust deed providers will want to take a case where debts are less than £10,000, however, there's no minimum figure required for a trust deed. The complete figure of unsecured debt shouldn't incorporate mortgages or other financial commitments such as hire purchase or leases. Related shortfall debts might be relevant but you should consult your trust deed advisor.

If your debt total is significantly lower than £10,000 you ought to think about sequestration (bankruptcy), the debt arrangement scheme or a debt management plan if you can't cope with your debts.

An additional piece of vital information to collect is the value of your assets. This could comprise of a number of things, e.g. home equity, a car valued above £3,000, savings and an endowment policy. A pension would usually be exempt from this category. Qualifying assets may be utilised to help repay what you owe as they "vest" in the Trustee.

As a homeowner with equity you'll have to carefully consider whether you can access that equity and pay it into the Scottish trust deed. If you don't have the means to do this your home may later need to be put up for sale. As a result, contemplation of the debt arrangement scheme is advocated as it would keep your home safe and allow repayment of the debt in an affordable way.

Working out whether you can afford to pay over a monthly value to the protected trust deed (or other option) is a further vital area. If you can't afford a sum of approximately £150 per month or larger the trust deed avenue might not be available. Those with greater levels of debt might need to be able to pay considerably more than this each month to make an arrangement work for all people involved. Without the ability to pay an acceptable offering one of the paths to bankruptcy might need to be identified.

Other options such as a debt management plan or the debt arrangement scheme ought to be taken into account if the amount you can afford to pay back over a 3 year stretch is more than your total debt. A protected trust deed might not be an option if you can afford high repayments.

Certain professions have restrictions with regards to formal debt resolution options like protected trust deeds. It may be an entry barrier or for roles such as police officers, prison officers or the armed forces as there are strict stages to complete before continuing with a trust deed. Individuals employed in the finance sector should review their employment contracts because this could include specific restrictions.

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