Common Trust Deed Questions

1) Is a trust deed a legal process?

Although the trust deed is a legally binding agreement it is not subject to a legal process in the same way that a sequestration is.

2) Is a trust deed a process that requires court involvement?

No. There is no court involvement required to set up a trust deed.

3) When should I consider a trust deed as a solution for debt problems?

In very general terms a trust deed may be an appropriate solution for your debt problems where you have some assets and / or disposable income to enable some payment to your creditors, but the level of assets and / or disposable income are insufficient to enable payment in full at this time or in the foreseeable future.

4) How does a trust deed work?

A trust deed is an agreement whereby certain of your assets and/or disposable income is transferred to a trustee. The trustee will sell the assets and manage the proceeds and/or disposable income for the benefit of your creditors. Your asset's value and/or disposable income effectively creates a fund of money for distribution to your creditors in lieu of the sums due to them.

5) What am I committing myself to if I sign a trust deed?

A trust deed is a legally binding agreement between you, your trustee and your creditors. You are agreeing to make certain contributions towards your outstanding debts. Failure to co-operate with your trustee or to adhere to the terms of the trust deed is a serious matter which will be dealt with by your trustee accordingly.

6) How long does a trust deed last?

A trust deed will normally run for three years so long as you co-operate with your trustee and comply with the terms of the deed, although in certain circumstances it is possible for a trust deed to be completed in a shorter period.

7) I have moved away from UK but have debts with UK creditors from the time I lived Scotland. Can I do a trust deed?

If you have lived in Scotland during the past 12 months, you can do a trust deed.

8) Can I enter a trust deed if I already have CCJ's against me?

Yes. You are not excluded from this solution if you have CCJs.

9) A creditor has initiated debt recovery proceedings against me. Can I still enter a trust deed?

It depends on the stage of the proceedings. You will only be unable to enter a trust deed if you have already been served with a charge for payment of money. This is the final step prior to bankruptcy (Sequestration) proceedings which cannot be overturned by the signing of a trust deed.

10) Can I settle my debts for less than I owe using a trust deed?

Yes. The level of funds paid to your creditors will depend on the funds collected during the period of the trust deed. This will depend on your monthly disposable income and available assets.