Repay What You Can Afford & Write Off the Rest
A Protected Trust Deed allows people who are struggling to maintain their debt repayments to consolidate them in to one monthly payment, based on their affordability, and write off any debt they cannot afford to repay at the end of the process.
A Trust Deed usually lasts for 4 years and will leave your credit file in the same time it takes a missed payment to leave.
If you have assets, such as a home or motor vehicle, a Trust Deed often allows you to retain these, whilst writing off unaffordable debt.
Your credit file will be updated to reflect that you have signed a Trust Deed and this information will remain on your credit file for six years. This means that you may find it difficult to get credit for a period after your Trust Deed is finalised. Should you come in to any assets during the four year period following the granting of your Trust Deed, these would first be conveyed to your Trustee and in order to complete your Trust Deed early, you would need to repay the full balance of your debts at the date of signing, plus statutory interest & your Trustee's fees.
What are the advantages of a Trust Deed?
- Affordable payments
- 4 year repayment term
- Can often protect assets, such as your home
- Write off debt you cannot afford to repay
What are the disadvantages of a Trust Deed?
- Your credit rating will be affected
- To complete it early, you will need to pay your Trustee’s fees, as well as your debts in full
- Creditors can refuse to Protect a Trust Deed
- Certain job roles can be affected