Why two trust deeds will not work for every couple

In this blog a member of the Trust-Deed.co.uk advice team explains why two trust deeds aren’t always the best options for couple looking to deal with their debts. It’s surprisingly common for partners or spouses to each use a different debt solution option depending upon their individual circumstances.

“Giving advice on Scottish trust deeds and the other debt solutions can vary greatly as there are so many different circumstances to take into account. This is particularly the case with couples when they call looking for more information on trust deeds and other options.

There are quite a few circumstances where it is not always possible, or advisable, for both partners to sign trust deeds. Often it makes more sense for one of the individuals to look at an alternative option. This can be a surprise. Many partners or spouses assume that they will both be dealing with their debts in the same way.

As a debt adviser it’s true to say that no two sets of client circumstances are ever the same. It is always necessary to discuss all the circumstances and look at the financial details involved. This can quickly narrow down whether Scottish trust deeds, sequestration (bankruptcy), or the debt arrangement scheme are relevant options for each person.

One of the circumstances which arises often when couples seek debt or trust deeds advice is that one partner is working full time and the other part time. When we break down the numbers the result is typically that the partner who is working part time will have less money to pay towards their debts than the other.

In some circumstances the lower amount means that they lack sufficient disposable income to meet the acceptance criteria for protected trust deeds. In other circumstances their partner may have so much disposable income that protected trust deeds are not necessary for both as the debt can be paid back via the debt arrangement scheme (or even on contractual terms) within a reasonable period of time.

Where one partner is not working at all trust deeds will not be a viable option for them individually. This can mean that this partner looks to sequestration as being the way to deal with their debts, though consideration must be made about issues like their home first.

Sometimes it will turn out to be the case that one partner has much higher levels of debt than the other. Even though they view their financial affairs jointly, I need to look at the situation from each of their individual positions. This is because there is no such thing as a joint trust deed or a joint bankruptcy.

You’d be surprised how often I work with couples, married or otherwise, who end up dealing with their debts in slightly different ways. This prospect can worry people at first, but once they understand why this is the case (and why it’s in their best interests) it never turns out to be a problem. Two trust deeds are right for many couples, but in many circumstances a combination of options turns out to be the best way forwards for them.”

Tags: trust deeds