Who is this arrangement designed for?
	You can apply to Trust Deeds only if you don’t have enough available income to meet your unsecured debt repayments of £10,000 or more. If you are eligible to the service, you will sign a Trust Deed that is a formal arrangement between you and a licensed Insolvency Practitioner, the Trustee. He or she might agree to register your deed as ‘protected’, but for this some criteria should be fulfilled. This option is recommended as long as protection defends you from interests and from creditors’ legal action against you. But remember that you are not allowed to change your mind in that period, so you must keep abreast of your pledges. However, as your near-future aim is to become debt-free, it is worth considering, isn’t it?
	Why can you ‘trust’ in a Trust Deed?
	Because it is a formal agreement and the Insolvency Practitioner makes it sure it is advantageous both for you and for your creditors. He is also responsible for supervising the Trust Deed until it is effectively completed. In other words, he will help you annul your unsecured debts in order to shun the danger of bankruptcy. Generally speaking, you agree to spend an agreed period paying a fixed amount to the Trust Deed monthly. You won’t ever have to deal with your creditors, as the Trustee makes them promise not to take any measures against you, not to make harassing calls, but also to write off all outstanding debt as the agreed period is over.

Basically it is a simple procedure to initiate a Trust Deed. You have to tell the Trustee which may be one of the banks whom you owe money and how much is your disposable income. This will be the amount of money you are going to pay into the Trust Deed each month. Moreover, your Trustee takes care of your creditors and tries to make more than two thirds of them agree to the arrangement, which they do in most of the cases, so the arrangement will become a Protected Trust Deed. This status prohibits your creditors from taking any action against you and they also have to accept the balance of the arrangement as full settlement at the end of the agreed period. The only thing you must not forget is to inform your Trustee if there is any change in your financial situation while your Trust Deed is valid. So all you have to do actually, is make correct and regular payments (usually for three years), and when the period is over, you are debt-free!

But why is a Trust Deed good for your creditors?

It is because with this procedure they can get more money from you and more easily than they would if they stood for an alternative option such as bankruptcy. They can be sure the Insolvency Practitioner will examine your financial situation attentively and will take into consideration lenders’ interests as well. Not to mention the fact that a Trust Deed cannot be compared to the much-costing, time-wasting legal action.

After you understand that Trust Deed is good for your creditors, let’s see how it can help you! It offers various benefits over bankruptcy. One of the most important benefits is that your monthly contribution is calculated realistically. That is to say, it is based on what you can afford each month after deducting all your basic expenses from your income. A further benefit is the legal protection against any action from your lenders after you sign the Trust Deed. So you will have no pressure any more! Compared to the Debt Management Plan (in which case creditors can increase the charges and interests at any time) the protected Trust Deed has the advantage that no charges can occur. So in case of a protected arrangement, you will escape from interest charges, and creditors will have to write off the remaining debt as well. That’s why you will have significantly lower amounts to be paid monthly and you can put a slip of paper on the wall that reminds you to the exact day when you are finally debt free. It sounds great, isn’t it? Moreover, it has these advantages without many of the inconveniences attached to bankruptcy: you don't have to sell your house; there's no court process ensnared; and it does not exclude you from having certain jobs. Nevertheless, there is a drawback that we should mention. After finishing your Trust Deed, it will influence your credit rating for three more years, and this possibly makes it more difficult to get credit. Anyway, it is less damaging than other alternatives, or than doing nothing.

All in all, in case you are worrying about your unsecured debts, a Trust Deed could be a good solution for you. You can be aware of the exact monthly costs, and the exact date when you are debt-free for sure. So you can avoid bankruptcy and become debt-free normally in three years. You will make only one affordable monthly payment from your surplus income, your creditors will have to write off all the debts you can’t afford, and you don’t have to worry about their legal actions. Isn’t it a good idea? Your Trustee deals with your creditors, you deal with your affordable monthly payments, and after three years you’re debt-free! Choose Trust Deeds!