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Do Protected Trust Deeds Work?

25th November 2010

Earlier this year Trust-Deed.co.uk ran a survey of visitors to the website. This trust deed survey was unique as it asked respondents whether they were happy with their decision to enter into a trust deed.

We wanted to know whether people who had signed a trust deed in Scotland looked back on their decision positively, or whether they considered their decision to have been a mistake.

The question we asked was:

“If you are currently in a Trust Deed (or have completed one) do you consider that you made the right decision to go ahead?”

The results (amongst those who expressed a definite response) were:

Yes: 89%

No: 11%

These results are very interesting. A forum website such as Trust-Deed.co.uk by its very nature attracts visitors who are experiencing difficulties or problems with their trust deeds. Despite this, the vast majority of people still believed they had made the right decision in signing the trust deed.

The results are also interesting given the level of problems reported in other areas of the trust deed industry. Previous articles and the survey results have indicated some problems with trust deed agents and introducers, trust deed websites and even the service levels provided by some trust deed companies.

The very nature of trust deeds provides some protection against a bad decision:

  1. Creditor influence. If creditors object to trust deeds in significant numbers the trust deeds will fail to become protected. Should creditors feel that a trust deed is an entirely inappropriate option for a particular client, they are much less likely to agree to it at all. Therefore creditors may provide some protection against future regret.
  2. Trust Deed regulation. While many parts of the trust deed industry are not strongly regulated insolvency practitioners are quite firmly controlled by their professional bodies. We have seen elsewhere in the survey that this isn’t a guarantee of service quality, but an IP does need to justify the advice provided to their professional body. This also restricts the number of inappropriate trust deeds that are signed.

Of course these results do not ensure that a trust deed is the right option for everyone. Depending upon circumstances a whole range of other options may be preferable. Our trust deed forum regularly includes questions about scenarios where our experts advise that sequestration, debt management plans or the debt arrangement scheme may be better options than a protected trust deed.

The reality is that a trust deed can be an incredibly effective solution for people suffering very serious debt difficulty. It’s vital to take good advice in the first instance, and on this proviso, signing a trust deed is a decision that the vast majority of people believe to have been correct.

For further Trust Deed news and information, please visit our forum where we have a wealth of impartial and free advice from experienced industry experts.

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