Jan 23 2014

Differences Between a Trust Deed and Debt Arrangement Scheme

Posted by admin in Uncategorized

Among the many solutions designed to help Scottish citizens get out of debt, two of the most popular are definitely trust deeds and the Debt Arrangement Scheme (DAS). Although there are other options available, these tend to be the two that most people focus on initially due to the fact that they offer a clear way to pay off a debt that may be spiraling out of control.

Unfortunately what most people aren’t sure of is what the differences are between both the DAS and trust deeds. On the surface, both may even appear rather similar insofar as they allow you to pay off your debt via monthly payments and the interest on those debts are frozen.


“What is the Debt Arrangement Scheme?”

In simple terms, the Debt Arrangement Scheme (DAS) applies to those who can repay everything in full, even if at a slower pace.    The total sum paid off will end up being lower due to the fact that the interest will be frozen, but you’ll effectively be paying off the entire sum that you owe at the point where you enter the DAS.

If you’re a homeowner, your house and any other assets will remain unaffected – though your credit rating will be classified as ‘high risk’ for about 6 years.


“What is a Trust Deed?”

Unlike the DAS, a trust deed Scotland is for those who are unable to pay off the entire debt but will be able to pay off at least some of it. Homeowners may find that some of their assets need to be sold off to cover the remainder.

Another big difference is that there is no legal protection on a trust deed unless it qualifies to become a ‘protected trust deed’.

Hopefully understanding these differences will help you to figure out which one you should be looking at to help you out of your debt woes.

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