How it works

The stages of securing a trust deed…

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1. Step one – consult a Money Adviser

The first step when considering a Trust Deed is to consult a Money Adviser who will work with you to produce a statement of all your debts, income and expenditure. They will look at whether your debts are unsecured debts (for example personal loans, credit cards, store cards, catalogues) or are secured against your home or other valuables (for example your mortgage or a secured loan).

The Money Adviser will take all your circumstances into account when considering whether a Trust Deed could help you. They should inform you of all the debt solutions you may qualify for, and the pros and cons of each. They should also tell you how much you are likely to contribute from your disposable income, and what if anything will happen to your home and car.

2. Step two – your Trust Deed is drawn up

If you’ve decided you would like to apply for a Trust Deed, and if your Money Adviser thinks you are likely to qualify, your Money Adviser will now draw up the Trust Deed itself. This is a document declaring that you are insolvent, setting out your financial position, how much you are offering to pay your creditors from your income, and whether you will be releasing value from any assets. The Trust Deed is a legally binding agreement, so it’s important that your adviser explains it in detail, and that you have time to consider it before signing. We offer appointments either in our premises or at your home if you would like to go over the details in person.

3. Step three – your Trust Deed is proposed to your creditors

The adviser will now send out your proposal to your creditors for their acceptance. This will contain details of how much you are going to contribute towards your debts, from your income and/or assets. Creditors are not obliged to agree. However, if 65% or more of your creditors (by value of the debt) agree, the Trust Deed will become Protected, which means that all the creditors are now bound by the terms and cannot take legal action against you for any debts included in it.

4. Step Four – you make contributions to your Protected Trust Deed

You now start making your regular contributions from your income, and your adviser will help you make any arrangements to release equity from your property. Throughout the term of the Trust Deed it is vital that you keep to your budget, maintain your contributions and keep your Trustee informed if there are any changes to your income or circumstances.

5. Step Five – after the agreed contribution period, you will be discharged from your debts

When you have made your contributions for the agreed length of time, and complied with all other terms of the Trust Deed, you should be discharged from remaining included debts.

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