Trust Deed News | The Scottish Middle Class & Personal Debt

Increasing numbers of senior business people and professionals are seeking out the services of debt advice professionals and Scottish trust deed advisers; with a protected trust deed often being the desired outcome. Case studies show that some middle class people who start a trust deed will have previously earned in excess of £100,000 per year but will have been left in deep financial trouble when their income fell dramatically thanks to tough economic times.

In many of these cases, the trust deed user involved will have seen their income of £100,000 fall to a level around £50,000; this might sound like a lot of money but it just isn’t enough to meet the financial commitments that were taken on in better times for everyone. However, many people in this group do own homes and have, over the years, paid down their mortgages significantly. Even with declining house prices they may be sitting on a fair bit of equity in their homes. Selling the home may therefore be a traumatic but logical way for some people to deal with consumer debts. This option is much less damaging in the long-term than the last-resort option of a trust deed.

A recent press release from National Debtline states that nearly 1 in 10 of their clients earns more than £50,000 and 2% earn £100,000 or more. Other evidence shows that families with a combined income of more than £72,000 are now far more likely to be using their overdrafts than they were just two years ago. Growing overdrafts may be indicative of a deep-rooted financial problem and are often associated with entry into protected trust deeds later.

The problem could also reach older higher-earners in their fifties who had great pay and conditions but have lost their jobs to redundancy. New jobs with the same pay and benefits are hard to find. However the research and industry opinion suggests that, at this age and in this income group, people are less inclined to hide from debt issues and more inclined to get them dealt with using tools like a protected trust deed or the debt arrangement scheme for example.

When sellable assets exist, it is much easier to resolve debts quickly without recourse to a trust deed or sequestration. However, for most people, their prime asset is their home, something that most people do not want to give up. This is another reason to deal with debts early before they escalate further and further. Less serious debt resolution options, like a DMP or the debt arrangement scheme, keep homes out of the equation. The Scottish trust deed and sequestration will not exclude the home if there is equity there, and the home is therefore quite likely to be put in jeopardy by such measures.

Pensions that have grown into a decent sum might be a possible option for some who are in debt. There could be an option to take a lump sum to deal with debts. However people should also remember that they will need a retirement fund, and in almost all circumstances their pension is protected in insolvencies like a trust deed. Therefore, does using you pension to clear debt make best sense overall?

If you have recently taken a financial blow in terms of income and can no longer maintain your current obligations, you need to take stock of all your options. A trust deed is just one of these options. If you would like to investigate the Scottish trust deed further, our Trust-Deed.co.uk website is an excellent source of information and advice. Speak to current trust deed users and to trust deed experts in our trust deed forum or browse our many informative pages to learn all about the Scottish trust deed. For any further trust deed guidance or debt advice our team of professionally qualified debt advice experts are poised to help on: 0800 042 7201.

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