Scottish Trust Deed

Scottish Trust Deed

The phone calls keep coming in, telling you what you already know. You’re in debt and you’re in debt big. The Visa/Mastercard and Discover bills may intimidate you to the point where you see no point in even opening them. So the question becomes, what’s a person to do when they’re all spent out? How can the average Joe clear credit cards without taking out a huge loan in the process? While it can seem as if the only choice might be to continue making monthly payments, there are other options that frequently make more sense.

If you’re a resident of Scotland, one solution in the quest to clear debt is known as the Scottish Trust Deed. Also known as a Protected Trust Deed (PTD), this method of easing one’s debts is a legally binding method of paying back debts over a four year period. The debtor submits a proposal of repayment (with the help of a licensed insolvency practitioner) to his creditors. This proposal allows a person to make payments that fit in their budget for typically a period of four years. However, the debt strapped individually is only required to repay what they can honestly afford. By the end of the agreed upon period, the remaining balances will be cleared, assuming the debtor has held up his end of the bargain.
Sounds great, huh? Well there are other points to consider as well.

PROS

  • Numerous debts can be placed into this plan, but only one affordable payment must be made each month. This simplifies the repayment system and everyone gets a piece of the pie.
  • No more late fees or increased interest fees, assuming you make your payments on time, ever month. Additionally, if you were to come into a bit of a windfall, you would be required to pay back all of the amounts owed.
  • No more harassing calls or dealing with the credit card companies. The IP is now the one who deals with all creditors.
  • Homeowners should be able to keep their homes, although the IP will be interested in their available equity.

CONS

  • This type of method to repay debts is only valid for unsecured debt.
  • Just because you list a creditor does not mean they have to accept the proposal.
  • While under the plan, there are limits on spending and the payments could fluctuate.

This type of plan is not for everyone, but it could be a huge help to many. Therefore, before you talk to one more creditor, seek debt advice to see your way clear of the mountain of debt.