Trust deeds

trust deed is an often-used debt settlement mechanism in Scotland. Trust deeds are legally binding agreements between debtors and creditors. The debtor agrees to keep his assets with a trustee who is the licensed insolvency practitioner. The assets are to be used by the trustee for the benefit of the creditor. Every month a fixed payment is made to the creditor in settlement of the debts. The monthly payments are based on the individuals capability. Any amount left unpaid at the end of the period is written off.

Trust deeds are more advantageous in the debt settlement process. The debtor does not have to deal with the creditors. Since the entire assets are in the hand of the trustee, all correspondence is to be addressed to the trustees. The cost of trust deeds is lesser than the charges on sequestration. Companies are not prohibited from trading if they enter into a trust deed. Neither are the individuals prevented from holding such posts as directorships on account of trust deeds. One of the most glaring advantages of trust deeds is that they do not record the trust deeds in the credit file of a borrower.

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