Do I qualify?
Here is an example of how a Scottish Trust Deed could make your debts affordable:
Let say your unsecured debts
looked like this...
Total Owed £28,000
After a Scottish Trust Deed...
New monthly repayment is based on affordability and varies from plan to plan.
Visit our FAQ Section for any in depth information on Scottish Trust Deeds
It can be hard to think that the assets you may have built up over the years may have to be sold to contribute towards your Scottish Trust Deed. In fact, you might even begin to fear that everything around you could disappear, such as your television, iPod or mobile phone. Will you have to part with precious items like your wedding or engagement ring?
While it is important that as many of your assets are used in the most effective way possible, the idea that everything you possess will be sold is fortunately not true. Trustees are not ogres, but they do need to satisfy everyone in the process and it can be a very fine balance!
Property, probably your biggest asset, is the first thing a trustee will look at. If you have more than one and they contain equity they will need to be sold or remortgaged to release the money. Your own home can be excluded from your Scottish Trust Deed once protected providing certain conditions are met.
After that, the trustee will be looking for you to release money from savings accounts such as ISAs, investments such as stocks, shares and market funds, expensive jewellery (but NOT your engagement or wedding ring), valuable vehicles that you own outright, caravans, boats and other leisure vehicles. Sometimes if your pension is large that may also be considered.
It is by no means set that you will have to part with all of the items above. For example, if you outright own a car worth around £3,000, your trustee will probably be fine with you to keep it as you need to use it to work. If it’s worth £10,000 the Trustee is likely to ask you to sell it and find a cheaper model so the difference can be passed on to creditors.
For example, while it might seem sense for you to keep hold of a caravan for inexpensive holidays, this is really up to the discretion of your Trustee. It is very likely a holiday may be considered a luxury during the term of your Scottish Trust Deed budget, and your caravan would have to be sold if it has a reasonable value.
When it comes to assets that are excluded, anything you use for day-to-day living or to generate an income necessary to make payments. So for example this would include:
One of the duties of a Trustee is to look at the circumstances surrounding the purchase and sale of an individual’s assets, both current and past. If any assets have been sold – in some instances up to five years - before the Scottish Trust Deed agreement was signed, the trustee will want to assess their value and whether they were sold for a fair price. There have been instances where an asset has been sold for much less than it was worth – called a transaction at under value - to remove it from the Scottish Trust Deed inventory with the intention of getting it back later. Where this is proved to be the case, the Trustee will apply to the courts to have the sale revoked so the assets come back within the inventory.
For example, if someone gifts ownership of their share of their family home to their spouse before signing a Scottish Trust Deed without receiving back it’s full worth, the Trustee will assume a Transaction at under value has taken place and ask for the transaction to be reversed so the rightful share can be passed to creditors.
The aim of a Scottish trust Deed is to let you enjoy a decent standard of living while at the same time making sure your creditors receive back a proportion of the debt you owe. At no time will you be forced to live on less than you are able to, so you need not fear you will be left in poverty. That will almost certainly lead to the failure of the Scottish Trust Deed and it is in no-ones interest to let this happen.
For more information about how Scottish Trust Deeds could affect your assets, call to speak in confidence to one of our advisers now on 0141 345 2904.