Can I include payday loan debts in my Trust Deed?
All kinds of unsecured debts can be included in your Trust Deed, including payday loans. If you have payday loans and other unsecured debts that you can't afford, a Trust Deed could:
- Freeze interest and charges on those debts
- Give you four years to repay your lenders at a rate you could afford
- Write off debt that you couldn't afford after four years
There are some conditions though, and whether you qualify for a Trust Deed will depend on how much unsecured debt you have and what kind of debts they are, how much you can afford to repay every month - and it may also depend on whether you are able to release equity from property you own.
You need to have unsecured debts of at least £5,000 or £10,000 worth of joint debts to qualify.
If you're having problems with payday loans and need some help, contact Wilson Andrews for dedicated debt help in Scotland.
Qualifying for a Trust Deed
If you can't afford unsecured debts like payday loans, other unsecured loans, credit cards and overdrafts, you might qualify for a Trust Deed. It's a form of insolvency that can free you of your obligation to your unsecured debts after four years of repayments (and possibly equity release, depending on your circumstances). Bear in mind that entering a Trust Deed will have an impact on your credit rating for six years.
A Trust Deed could be helpful if it lets you repay your debts in a shorter time. If you can't afford your repayments and it would take you much longer than three years to repay your unsecured debts, a Trust Deed might be a realistic option for you - although these aren't the only factors an expert would need to consider before recommending one.
You could qualify for a Trust Deed if you:
- Live in Scotland and haven't been involved in any other insolvency proceedings in the recent past.
- Have unsecured debts of at least £5,000 or £10,000 worth of joint debts.
- Are a homeowner or a tenant - but if you own your own home, you could be asked to release equity to help repay your unsecured debts. This would increase the size of your mortgage, but could help to bring your Trust Deed to a successful conclusion. If you can’t release any equity, your Trust deed may be extended by 12 months.
- Can't afford your monthly payments.
- Don't expect to repay your unsecured debts in full in a reasonable time.
- Have a reasonable amount of disposable income, so you can make monthly payments that your lenders will accept.
If you're having problems repaying payday loans and other unsecured debts, we could help. Speak to Wilson Andrews about qualifying for a Trust Deed, or one of our other debt solutions. We're here to help.
Article Updated 12/12/2013