The Trust Deed Process
Trust Deeds offer a number of advantages over sequestration (bankruptcy):
- Initiating a Trust Deed is similar to most formal and informal arrangements. Here you provide the Trustee (a licensed Insolvency Practitioner) with the details of everyone to whom you owe money. You will also provide them with details of how much you can afford to pay into the arrangement each month (this will be your disposable income) and any other financial information which may be of relevance.
- Following your signing of the Trust Deed, your Trustee will write to all your creditors. If more than two thirds of your creditors by debt agree to the Trust Deed, which they do in the vast majority of cases, it will be become a Protected Trust Deed.
- Protected status prevents your creditors from taking any further action, such as arresting your earnings, and freezes interest. It also means that they have to accept the balance of the Trust Deeds fund as full and final settlement at the end of the three year term.
- Any correspondence you receive from your creditors after signing the Trust Deed should be forwarded to your Trustee for him to deal with. You pay your Trustee the monthly payment agreed with him, whilst continuing to pay your mortgage, other secured debts and living costs as normal.
- Until the Trust Deed is finished, you must inform your Trustee if there is a change in your financial circumstances or if you move house.