Before making your final decision to start a Trust Deed it is important that you remember some key advice WTFS has given about how this solution is likely to affect you:
A Trust Deed is not the only debt solution which might be suitable to resolve your debt problem. Before making your final decision to apply for a Trust Deed you should also consider the other available debt solution options. For more information please see: Personal Debt Solutions
You will need to make monthly payments towards your debts based on your disposable income for a minimum of 4 years (unless you settle early with a cash lump sum). During this time all interest and additional charges are frozen. After your payments are completed any debt included in the Arrangement that remains unpaid will be written off.
Only unsecured debts which are highlighted in your Trust Deed will be included. Any unsecured debts which you leave out either by choice or mistake will remain outstanding. Secured debts such as your Mortgage are not included. You must maintain your monthly payments towards your secured debts even after you start an Trust Deed or you will risk the property or other asset that the debt is secured against being repossessed. You must also maintain payments towards your other priority debts such as rent, fines, child support payments and utility bills. If possible you should also continue to pay any CCJ debts until your Trust Deed is accepted.
A Trust Deed will have a significant negative impact on your credit rating. A record of the Arrangement will remain on your credit file for 6 years. During this time and possibly for some time afterwards your ability to get new credit, a new mortgage or other financial services will be seriously affected.
Once your Trust Deed is agreed your name, date of birth and address will be added to the Register of Insolvencies. This register is publically accessible via the internet. As such anyone could discover that you are in a Trust Deed if they search the register for your name. Once your Trust Deed is completed your name and details will be taken off the register.
During your Trust Deed you will be required to live within a restricted living expenses budget. You will have to pay all of your surplus income into the Arrangement. If your income increases your payments may also increase for the remainder of your Trust Deed.
If you are a homeowner, you will be obliged to release 100% of your share in any equity in your property to increase the amount you repay to your creditors. Generally speaking a valuation of the property will take place at the beginning of your Trust Deed but arrangements for the payment of this equity can be made at any point during the Trust Deed.
The lenders you include in your Trust Deed are not obliged to accept your proposal. It will be accepted provided that no more than one third in value or a majority (50%) in number of your creditors object to the terms proposed over a five week period. If your Trust Deed is rejected by more than a third in value of your creditors or more than 50% in number then you will remain liable for the payment of your debts.
If you start a Trust Deed but do not keep up your agreed payments then it is likely to fail unless a revised payment schedule can be agreed with your creditors. If your Trust Deed fails it is possible that you will lose all the money that you paid into it and your debts will remain outstanding. It is also possible that your creditors will petition for your Bankruptcy.