The recession, a lack of credit, increased interest rates leading to higher loans, credit card and mortgage payments – for those trying to get out of debt it’s been one thing after another. Then just when you thought it couldn’t get any worse, the Government announced its plans for cutting public spending, including a shake up of the benefits system and job cuts.
With no increase of income likely to help you cope, chances are your plans to get out of debt are disappearing further and further into the future.
If your finances are in such bad shape that the prospect of future cuts are already giving you sleepless nights, a Trust Deed may be one of the only steps you can take that will quickly help you get out of debt and let you get some sleep.
Although there are other options available to you, such as Debt Management Plans (DMP) these can take a considerable number of years to complete, often involve stressful negotiations with creditors and can wear you down eventually. A Trust Deed on the other hand, has none of these disadvantages and is often a better choice when you need to deal with debt quickly:
Write Off A Percentage Of Your Debt
A Trust Deed can help you write off some of what you owe, sometimes up to 70%, and help you get out of debt faster. Your creditors won’t get a substantial proportion of the interest and charges they have heaped on your original borrowings.
Less Time To Get Out Of Debt
A Trust Deed takes only 48 months to complete compared to a debt management plan, which could take more than 5 years to complete depending on how much you owe, so you’ll be debt free faster.
Quick To Setup
A Trustee can set up the arrangement within weeks of your first meeting. Compare that to DMP, which could take months for you to complete all the negotiations with creditors.
No More Interest!
Creditors cannot charge you any more interest on your debts once you’re in the repayment plan and all interest and charges are generally not applied to your debts.
Experienced Professional On Your Side
You have the support of a Trustee with an in-depth knowledge of finance and law. Their experience means they can offer advice on how to deal with unexpected financial events that would ordinarily push you off track if you were on a DMP.
Your Trustee handles all the negotiations with your creditors. Instead of wasting months trying to persuade reluctant creditors to accept your debt payment plan, your Trustee (Insolvency Practioner) arranges a payment plan with your creditors instead.
Creditors don’t try bullying a Trustee the way they would if they were dealing with you. Some creditors even employ people on a commission basis, such as bailiff and debt collectors to be nasty to customers and stress them out so much that they agree to anything they want. A Trust Deed cuts off this avenue. Only a very stupid creditor would try getting heavy with someone qualified in finance and law!
No More Hassle From Creditors
Because they involve a legal agreement, your creditors are prohibited from contacting you or trying to get you to break the terms of your Trust Deed. This means you can focus all of your attention on how to get out of debt faster instead of worrying who is phoning or banging on the door. With DMPs however, there’s nothing to stop a creditor trying to reopen negotiations or going back on your agreement with them.
Trust Deeds can teach important money management skills, which means as you become more financially savvy you can end up finding ways and means to pay more and get out of debt faster.
You’ll find your creditors won’t like the idea of you having a Trust Deed to get out of debt. They want you to do it the long hard way so they can get back as close to 100% of the money you owe them. But that will invariably lead to hardship on your part – long-term debt is demoralizing, overwhelming and frightening.
The most important thing for you is to find a way to pay it off as fast a possible with the minimum amount of stress. So disregard what your creditors want and focus on what you want: an overall reduction in your debt, to get out of debt faster, affordable monthly payments and a better standard of living.
Trust Deed Example
Example Unsecured Debts
|2||Credit card 1||£6,812|
Your Monthly Repayments Would Be
a Scottish Trust Deed £748
(total contractual repayments)
a Scottish Trust Deed £295
(total contractual repayments)
* Subject to creditor acceptance
* Payment subject to individual circumstances
* Credit rating may be affected
* Fees apply, subject to individual's circumstances. For more information on our fees click here