A New Year trust deed checklist

The New Year is a time when many people choose to confront their debt problems, problems which may have been a worry for months or even years. Whilst taking debt or trust deed advice for the first time is a frightening step into the unknown, for many people it turns out to be a liberating experience when they realise it’s an excellent way of dealing with their debts, enabling them to make a fresh financial start.

For most people a Scottish trust deed works out as they expected and hoped. However, common issues arise on our trust deed forum, issues which can cause our visitors to experience frustration and sometimes great amounts of stress. Most of these trust deed issues could have been avoided if things had been done thoughtfully and correctly at the start of the trust deed process.

If you are thinking about going ahead with a protected trust deed, please find our New Year Trust Deed Checklist to help you deal with your debts, and sidestep avoidable problems in future months and years:

Don’t deal with cold callers. The trust deed industry is well aware of the many complaints which result from situations where people received a cold call and were persuaded to start a trust deed. Reputable trust deed providers don’t cold call; it’s as simple as that. If you receive a cold call about a trust deed and it sounds like a good idea do not make any impulse decisions. You must carry out your own research into which firm will do the best job of handling the trust deed on your behalf.

Are you dealing with a licenced company? To offer debt or trust deed advice a company or individual needs to have a ‘consumer credit licence’ in place; the details of which should be clearly displayed on their website. If you cannot find this ‘permission’ to trade on their site, they are trading in a non-compliant way and may be trading unlawfully. Avoid at all costs.

Never ever pay an upfront fee! There are intermediaries that will charge you hundreds, sometimes thousands of pounds to ‘prepare your file’ before it is sent on to a proper trust deed firm. This is a complete and utter waste of your money and time, which creates extra risks and delays you absolutely do not need. If you haven’t signed the trust deed itself we’d suggest not making the payment.

Would a debt charity be best for your trust deed? Unlike debt management plans, there are no free providers of Scottish trust deeds. Most debt charities will refer you to a commercial provider. With that in mind, your time might be better spent looking for a great trust deed provider, rather than a great debt charity if you are certain a protected trust deed will be the right option for you. If you do take free advice, remember you are not in any way compelled to use the firm you are referred to; check to make sure they represent the best option for you.

Does your trust deed adviser know what he or she is talking about? Surprisingly, many trust deed advisers are 100% unqualified. The good news is there are also plenty of professionally qualified debt advisers as well. Assume nothing; ask any adviser you speak to what professional qualifications they hold. What if they don’t have any? Would you take financial or mortgage advice from someone unqualified? Don’t risk it.

What other options do you have? You should have been told about a number of options. You can probably choose sequestration, the debt arrangement scheme or a debt management plan as well. Have each of these options been explained to you? Can you explain the benefits and drawbacks of each for you? If you not, you’re not ready to sign a trust deed and should seek further advice.

Don’t be rushed into doing things. Are you receiving frequent texts and phone calls asking when you’re sending your paperwork back? Have you been pushed into allowing someone into your home to collect paperwork you’re not yet ready to complete? Signing a trust deed is a big decision which should be taken only once you’re certain it is the right solution for you. Good firms provide you with time and space to think things through. Sales operations will chase you and push you. You can imagine which type of firm is likely to serve you best over the years of the trust deed.

Check up on firms and compare. Why does our trust deed forum see some firms receiving regular praise and others regular criticism? It’s always been like this, although the firms being criticised change over the years as some improve and others provide declining levels of service. The fact of the matter is, some trust deed firms act in a client-friendly manner while others seem to become dictatorial, arrogant and bullying once the trust deed is signed. Have a read around our forum to see how poor trust deed firms sometimes act and the names of those that regularly receive praise.

Don’t leave it too late. You should take plenty of time to find the right firm and be certain a protected trust deed is the right option for you. However, if you are behind on payments and under threat of legal action, a prompt but considered decision is probably needed before creditor legal action complicates things further.

Make sure everything you are told you have IN WRITING. Before you sign a Scottish trust deed, you should demand written clarification on how the process will work in terms of issues such as - your home, your car, overtime earned, bonus earned, commission earned, will you be pushed into making a PPI claim and so on. Once you’ve signed the trust deed it is the role of your Trustee to make decisions in such areas. It’s best the decisions made are confirmed in advance so you know exactly where you stand and have the evidence in place.

We hope this New Year trust deed checklist helps you to think carefully about the considerations you should have at different stages of the trust deed process. For any further information please do not hesitate to call our trust deed advice line on 0800 043 7201 or post a question on our trust deed forum.

Trust Deed Firms