Hello money and welcome to the Scottish Trust Deed forum.

There's no reason for your parents to be deliberately made aware of the Trust Deed. An exception might be if you co-own any significant assets?

Details of Scottish Trust Deeds are made available on the website of the Edinburgh Gazette so you should be aware that it is publicly available information.

Addresses do not have credit records, however persons who live together may show as being financially connected on credit searches. Lenders can choose whether to take this into account or not. If you are not financially connected to your parents you can file a "notice of disassociation" with one of the credit reference agencies that will remove the linkage (if it exists).

Hello,

Thank you so much for your reply.

I do not co-own any assets with my parents or am financially connected to my parents. I assume this means having any joint loans etc? The only payment I contribute to them would be my dig money each month.

I have a good few questions that I really need some help on:-

1. I have approached a company who said they would be able to provide me with a Trust Deed and to reduce my monthly payment figure to ?ú268 per month. Although i am slightly worried as the figures they have made up to put forward to the Trustee states that i pay rent, council tax, bills etc, this justifying the expenditure (but i do not pay any of these) is this correct? I am slightly worried this is dodgy (what if bills are requested etc)

2. I own a car which has been paid off, can they do anything about this?

3. What would happen if all the Creditors do not agree to have the Trust Protected?

4. Would I be asked to pay any fees or interest to the Trustee?

5. Who funds a Trust Deed? i.e is it the Government? who pays off the debt? and how can a company justify dismissing nearly ?ú20k of debt.

6. I understand this will adversely affect my credit rating during and after the Trust Deed has come to an end. Although, how long would this affect me obtaining credit i.e to gain a joint mortgage?

These are some very good questions. I'll try to work through them in the same order that you raised them.

It does seem reasonable that you could financially disassociate yourself from your parents for the sake of credit scoring.

If the people you have been speaking with have encouraged you to proceed with false numbers you should avoid them like the plague. They should be banned from offering their "services". Sadly there are people out there to whom making a "sale" is more important than providing good advice.

With this in mind how much do you realistically think you can afford to pay towards the debts each month? There may be better options than a Trust Deed available to you (a Trust Deed should be treated as a last resort) and we'll point you in the right direction if there are.

How much would you guess your car is worth?
Do you have a reasonably need for it (e.g. work commute)?

Not all of your creditors need to agree for your Trust Deed to become protected though if there are too many objections it may fail for this reason. Looking at the details of your case a good Trust Deed firm will, through experience, be able to point out any potential issues or reassure you that objections are highly unlikely.

The Trustee will charge fees. These fees are deducted from the pool of money you are contributing to the Trust Deed (from the amount you can reasonably afford) and have been agreed between the Trustee and the creditors as part of the Trust Deed.

No-one pays off the unpaid debt. The lenders will not be repaid. They took a commercial risk in lending the money and understand that a small proportion of their lending will never be repaid. The reason they may accept the Trust Deed is that the financial position of the debtor is such that a Trust Deed represents the best prospect of at least getting some of their money back.

Anything that goes on your credit file will stay there for six years and lenders are likely to take that into account when considering whether to lend and/or on what terms they will lend.
Mortgage lenders can continue to ask whether you've ever been in a Trust Deed in their application forms even after it no longer shows on your credit file. How they will choose to use that information if they request it is up to them.

Hello,

Oh my goodness, thank you so much for your reply to all off my questions. I cannot thank you enough. I have never used a forum of any kind before & this has reassured me a bit even although I am in a mess.

Firstly, i am going to contact the company straight away and ask them to withdraw my application. It was only to the stage where they would possibly contact the Trustee. The only information they had about me was my name & address and amount of debt due. Will this affect me in anyway?

I currently pay ?ú840 in total to all my loans and realistically what i could afford each month would be half this amount. I really do not want to enter into a Trust Deed and I really would do anything to take another option and if you could advise me of any alternative, that would be much appreciated or people to contact.

I do not know the actual value or what my car would be worth but i do need the use of it greatly. No one in my household drives and I need it to commute.

Any other information would be greatly received.

Many thanks.

Hi money,

It will not affect you if you withdraw permission from this company to proceed.

A couple of thoughts on some options open to you if the amount you can afford is ?ú420:

1 - A Trust Deed. You'd need to pay what you can afford for 36 months. That would total ?ú15120. The rest of the debt would be written off. If your car is of significant value you may need to make an extra payment in lieu of that. If your financial position improves over the next three years the amount you pay would go up.

2 - The Debt Arrangement Scheme. You'd need to contact a Money Advisor. Visit the MoneyScotland website for more details. Essentially you'd pay what you can afford until the debts are cleared. At ?ú420 per month this will take about five years. This Scheme comes with some legal protection. There have been comments on the forum that some people have had to join very long waiting lists to see a Money Advisor to get this going though this seems to vary by area across Scotland.

3 - A Debt Management Plan. A debt management company or organisation would deal with your debts in a similar way to the DAS scheme. The CCCS would do this without charge to you. Commercial debt management companies would deduct a fee from your monthly contribution which would increase the repayment period. You don't have legal protection but as the repayment period is relatively short and you have no major assets legal action would seem very unlikely. This option can normally be set up pretty quickly.

Hope this is a useful starting point.

Hello,

Thank you for your reply to my questions, you have been very helpful and I will think about this carefully before proceeding. I think your third option might be worth looking into.

Your time and answers has been greatly appreciated and I will probably be back in touch very soon to ask more???!!

I hope this okay, thank you so much.

Glad I could help money.

Just let us know if you'd like any more information.

Good for you, money, in making sure you have looked at all of the options - and as TDA has wisely set out, you probably have a few options to choose from given your circumstances.

A trust deed would not normally be the first port of call, it is a formal insolvency arrangement after all. If it can be avoided and debts managed affordably within a reasonable timescale then great. However, I would urge you to consider what you can afford carefully - are you being realistic or would you still be struggling with the kind of payments you suggest? Sit down and go through your budget carefully would be my advice, so that whatever option you choose is likely to work and does relieve the pressure.

Best of luck

Kevin

Hi all

This is a very interesting post as the 'service' and advice received from these companies seems to be fairly common unfortunately.

As TDA says, these companies are looking at the sale and the payment rather than following a best advice route.

I hope it all works out for you.

Mark

Hello,

Thank you to all of you for replying to my posts.

I have taken all your comments on board and have been thinking of every possible way to sort this out. I really do not want to enter a Trust Deed at all and this would be my last resort, I was unaware how severe the consequences are.

I have sat down and worked through my finances and realistically I could pay ?ú350 a month to all my three loans. Currently it is ?ú740, plus ?ú100 which is transferred automatically by my bank to save towards paying towards the my large bank loan to reduce it.

What would you recommend that would not be as severe as at Trust Deed? I understand entering something else is not ideal either but this it the only option I have as I cannot cope at the moment.

Would you be able to recommend any firms that would be able me through with this or what steps next to take?

Your help is much appreciated. Thank you.

I think you should take a look at the Debt Arrangement Scheme as mentioned in my previous post.

Another possibility is a debt management plan.

CCCS provide these without charge (they're funded by creditors).

Alternatively there are many commercial debt management companies out there who will handle this for a fee. Both I and this site are connected with "Bright Oak" which handles debt management plans; though as I say there is plenty of choice.

I'd suggest you speak with a few different types of provider to see which solution and company/organisation you feel most comfortable with.