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Can a Trust Deed be Settled Early?

A trust deed or popularly known as a Protected Trust Deed allows a borrower in debt to make a proposal for payment to creditors through an Insolvency Practitioner. The borrower in debt will propose payments less than the full amount of debt but creditors would be accepting the offer in full and final settlement of their claim. under a Protected Trust Deed, you repay your debt over a specified period of time, based on what you can afford. Once the specified period is over, any remaining debt is written off.

By applying for a Trust Deed our experts can help you become Debt Free forever.

Criteria for a Trust Deed

0 Debts of £10,000 or higher
0 3 or more creditors or unsecured debts e.g. credit card debts
0 A disposable income of at least £200/month
0 Resident of Scotland

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Creditors on will vote whether or not to accept or reject the proposal but at in the event that they do, a legal agreement is made which binds the borrower and the creditors. The said proposal will be created in accordance to your financial circumstances but would typically involving the borrower paying a fixed monthly payment, a lump sum or a combination of both. Upon signing the trust deed, all the assets of the borrower are transferred to the Insolvency Practitioner, who now becomes the 'Trustee'. Any of these valuable assets will be put on sale to help pay the creditors leaving only the things you need to live each day. Proposals will also secure a borrower's erratic income including overtime and bonuses.

Now, on to the question "Can a trust deed be settled early?" - A trust deed can be ended early, but in usual conditions only if a lump sum is paid in by a third party to cover any extra contributions that would have become due. If you have enough money to cover everything including the interests incurred by the debt then by all means, do the payment otherwise you have to follow what is written on the trust deed because the creditors will do their share of the bargain as well.

A case is different when the borrower pays more than the agreed amount if their financial circumstances are improved. The creditors goal is to get more money from the borrower hence and improvement in the borrower's financial circumstances is favorable to the creditors. The borrower should still follow and finish the trust deed in the alloted period and thus avoiding any future debt help advice and expertise.

Editors Related Trust Deed Articles

What is a Trust Deed? - Can a Trust Deed Clear Debt?