Pros and Cons of Trust Deeds

If you're thinking about a Trust Deed, it's important to know all about the pros and cons. When you talk to Think Money, we'll discuss your situation in depth.

If we are not convinced that a Trust Deed is the ideal solution to your debts, we will take you through all the alternatives and find the one that's right for you.

Before you go any further, take a look at the following questions:

  • Do you have significant unsecured debts (£10,000 or more) to multiple creditors?
  • Are you unable to meet your monthly repayments?
  • Do you have a reliable income - can you afford to make a regular payment to your debts for the next 3 years?
  • Are you a resident of Scotland?

If you answer 'no' to any of these, a Trust Deed probably isn't the answer to your debt problems – call us on freephone 0800 074 4222 and find out which debt solution is right for you.

If you answer 'yes' to all three questions, then a Trust Deed could be exactly what you're looking for. However, it's important that you understand the pros and cons.

Pros & Cons of a Trust Deed

Pros:

  • Legally binding agreement
  • At the end of the Trust Deed, your unpaid debt is written off
  • Reduce your repayments to one affordable monthly payment
  • Stop interest on your debts
  • Know exactly when you will be debt free
  • Legal protection from action by your creditors
  • Avoid the social stigma and financial consequences of sequestration
  • Protect your career – no statutory restrictions on employment

Cons:

  • Requires commitment - regular payments must be made for the full term (normally 3 years)
  • You can't take out further credit while your Trust Deed is running
  • You may be made bankrupt if you do not stick to the terms of the Trust Deed
  • You may have to:
    • Remortgage to release the equity in your property
    • Pay extra if you earn a bonus or overtime
    • 'Trade down' to a cheaper vehicle or sell other valuable assets
  • You will repay more of your debt through a Trust Deed than you would through sequestration
  • Your Trust Deed will stay on your credit file for 3 years after its successful conclusion, which may make it more difficult for you to get credit
  • The granting of the Trust Deed is advertised to creditors in the Edinburgh Gazette

« Return to the debt solutions homepage

Top of page

Subject to eligibility and acceptance, debt write-off applies on completion of a Trust Deed, alternative solutions may be offered. Fees payable. Your ability to obtain credit will be affected. Homeowners will be required to release the equity in their property. Calls may be recorded

Think Money Limited © 2008 All rights reserved. Pennington House, Carolina Way, South Langworthy Road, Salford Quays M50 2ZY. Company reg no: 04926097. Registered in England and Wales.