Assets and Trust Deeds
Homeowners in Scotland can use a protected trust deed to deal with their debts. It helps them to deal with their unsecured debts. It can protect their home from unsecured creditors. You agree a monthly payment when you start your trust deed. This is a regular payment funded from your income. It’s the amount left over after your bills and reasonable expenses.
Trust deeds also take account of your assets. Your assets include the things you own today. They also include things you come to own before getting discharged, for example if you inherit a property. A house or flat you own may be an “asset”. If the property is worth more than your mortgage balance, you have “equity”.
You must agree to convey your interest in any assets to your trustee when you sign a trust deed in Scotland. This means the trustee may be able to take possession of and sell the asset in question. In reality, assets can be safeguarded and it is very common to make an agreement whereby extra funds are paid in to the trust Deed in order that the asset remains unaffected. This applies to any significant asset you own, including vehicles.
It’s important to know that income and assets get treated separately. Your trustee considers how much you can pay from your income. They separately assess whether your assets can help to repay your debts. They’ll agree a plan with you to deal with your assets. This agreement gets put in writing for your reassurance and to avoid disputes.
If you’re a homeowner seeking trust deed advice please get in touch. We’ve been assisting property owners to enter protected trust deeds since 2007. You can contact us by telephone or by using our contact form.