Before thinking of choosing Trust Deed Scotland you need to weigh the legal and financial consequences. They need to be compared in terms and positive and negative angles before consulting your legal advisor who will also be your official trustee. You will be making all your communications and transactions through him only.
Protected Vs Unprotected Trust Deed Scotland
The general voluntary trust deed is also called as unprotected Trust Deed Scotland. This will mean the agreement between you and your creditors monitored by your trustee will have some obligations on your part.
- You need to transfer any moveable and immoveable assets which are in your name to the trustee who will remain in possession until the loan is repaid fully/partly. In case of voluntary trust deed you will not be able to exclude the assets. In case you fail to comply with the agreed terms, the trustee will reserve the rights to sell, remortgage or dispose your assets to make up for the complete / part repayment as per the instructions from your creditors.
- On the other hand protected Trust Deed Scotland gives you the right to safeguard your home will be relatively more secure from the probability of having to sell it. However you need to make sure that you are able to make the repayments on time without defaulting. In case of any defaults, the creditors may ask you to release equity of your home which is under the care of your trustee. It is only when these two options fail that they might be forced to sell.
- You are free from having to pay any interest and overheads once you have entered into protected Trust Deed Scotland. This might not be the case with voluntary Trust Deed Scotland. You need to consult your trustee to get him into negotiations with your creditors for converting your generic deed into trusted deed. But this process could be complex since the creditors might not agree easily for this. Your previous loan repayment record will be one of the main criteria on which your credit ratings will be based. If your trustee is able to convince your creditors you can enter into protected Trust Deed Scotland with them.
- In the protected form of Trust Deed Scotland you are free to continue with your existing profession without having to sacrifice it. In addition also you can plan for extra income sources. But you need to inform your trustee about those sources. He may then ask you to increase the monthly installments so that you can pay off the agreed outstanding loans earlier than the stipulated time frame. Your creditors will not be able to make any legal demands for recovering more money than the agreed sum at any time.
- Protected Trust Deed Scotland will also ensure handsome returns o your creditors than what they might end up getting when you declare bankruptcy. This could be one of the reasons for them to agree on this type of repayment.