Scottish Trust Deed and inheritance

dronkula

Hi,


So - in Feb 2013 I signed up to a 3 year Scottish Trust Deed to clear my debts which is due to finish next Feb (2016).


My total debts at the time (due to spiralling payday loans) was around £15,000.


Sadly, my father died earlier this year and at some point in the next 2 or 3 months I should receive a large lump sum after the family house has been sold.


Just wondering if anyone has any suggestions for the best way to handle this now? I think, reading the contract, with the trust deed I need to declare the money I get and give them at least half of it up to £20,000 (because of their fees as well) and still make the regular monthly payments up to next Feb.


Which would be the best way of trying to repair my credit quicker? Hand over the money to the Trustee, let them take their cut and hand out the rest to my creditors afterwards. Or, cancel the whole thing (everything that I'd paid into it so far stays with the trustee and nothing goes to my creditors) and contact each of my creditors and make them an individual offer to pay off the debt? (Although checking the annual statements I've had so far most of the money I've contributed has gone to fees for the trustees anyway and my creditors haven't got anything.)


Does anyone know if I'd be even allowed to cancel the whole thing earlier or would that get me into more legal issues?

coolcait

I'm afraid that you can't just cancel a trust deed. That should have been explained to you before you signed it.


You do have to let your trustee know that your father has died, and that you have inherited an asset.


What happens next? If the lump sum will cover all of the following:


- the trustee's fees and outlays
- the total amount of the debt that you had at the beginning of the trust deed
- interest on those debts


then the trust deed could end quite quickly after the lump sum has been paid in. You might have to do a bit of chasing to get it closed off!


If the lump sum won't cover all of that, then you'll have to keep paying into the trust deed until you've made all the agreed payments.


As for your credit record, as I understand it you can start contacting your creditors as soon as you get your discharge from the trust deed (Form 5). Any defaults etc should be the date that you signed the trust deed.