Everything You Need to Know About a Trust Deed

A Trust Deed is a legally enforceable contract between you and your lenders to make it easy for you to settle your liabilities. The agreement gives you the chance to pay your debts in manageable installments for around 48 months. This arrangement was introduced by the government in 2013 to assist persons who were having trouble repaying their creditors.

What is the Procedure?

Normally, you’re supposed to make one lower, more affordable payment each month toward your loans. You continue making these regular payments for around 4 years. Eventually, you are released and no longer liable for any residual debt owed to those lenders, effectively writing them off.

Remember, this only happens when you meet all your obligations. That said, this arrangement can be a useful tool for people who are having trouble making their minimal debt payments.

How can I know if I’m eligible?

To know if you are eligible, fill out our form. After that, we’ll call you and go over income statements with you to figure out monthly repayments that you can realistically afford. When this has been agreed upon, you will be issued the necessary papers, which you must return after signing.

We will begin processing your registration once we get the documents. This normally takes between 6 and 8 weeks. The AiB will be notified when you initially sign the agreement with your bankruptcy accountant.

What Happens After That?

They will enter your details into the Insolvency Register. Within a week, the trustee must immediately inform all of your unsecured lenders, supplying copies of the Trust Deed. In addition, the Register of Liquidations entry, a claim form, and a thorough statement of affairs must also be availed.

These documents will tell lenders everything they need to know about your financial situation. More importantly, they show all exempted assets, any payouts you’ve agreed to make, and the likely expenditures and transfer prospects.

Filing of Objection by Lenders

After receiving all the required documents, your lenders have 5 weeks to file an objection to the Trust Deed being protected. Anyone who fails to respond is considered to have agreed to the Trust Deed becoming protected.

Sometimes, less than half of your lenders may protest before the end of the five weeks. In such a case, the insolvency practitioner must tell the accountant in bankruptcy before four weeks elapse.

On the other hand, if the AiB is satisfied with the results, she will enter it on the register of insolvencies. This happens when proper disclosure was made, the protocol was observed, and adequate creditors agreed to the Trust Deed. This implies that the agreement is legally binding, and you will be free of your debts after 48 months if you fulfill your responsibilities.

What is The Term of a Trust Deed Scheme?

A Scottish Trust Deed typically lasts 48 months. However, it may be possible to finish sooner in certain instances, such as if you can repay lenders sooner or if you have assets to sell.

Unfortunately, you may be unable to satisfy your responsibilities within 48 months. Alternatively, you may be planning to make additional payments in place of the ownership of your inherited property. In such cases, a longer time may be allowed if fair and suitable.

Can I Still Get More Credit?

You will be bound by the terms of the Trust Deed once it is granted. You must make the agreed-upon monthly installments for the life of the plan. In addition, you will not be permitted to acquire more credit until the 4 years have passed.

After this time has passed, you will be rid of your debts and be able to seek credit again. However, you must be aware that signing a Trust Deed is an admission of seeming insolvency. As such it will affect your capacity to acquire credit in the future.

Wind Up

While most lenders use similar terms the final decision to lend money as well as the charges vary from one organization to the other. Keep in mind that you may not be able to get credit right away after being released from your Trust Deed. Lastly, you may only have access to expensive loans after your trust deed period expires.