In order to start the process, you have to contact a licensed Insolvency Practitioner or a company who will appoint to you an Insolvency Practitioner. You will have to meet several times with your Insolvency Practitioner, who will become your Trustee; this means that he will take care of all the arrangements for you. When you first meet your Insolvency Practitioner, you will have a talk on your financial situation, on how much you owe, who are your creditors, what is your monthly income and he will tell you what to do next. Of course, during the first meeting you will find out if you are qualified for a trust deed or not. If the Insolvency Practitioner considers that you are qualified for a trust deed, then the process starts. You will provide any relevant information to the Insolvency Practitioner and he will come up with a plan on how much money you can pay monthly. After you have signed the trust deed, the Insolvency Practitioner will announce in written form all your creditors, and he might invite them to a meeting, or they can only talk via phone or email.
The point is that all your creditors should receive a letter containing the trust deed, so they can read it and agree or disagree with the proposal. If more than three thirds of your creditors agree on the trust deed, it becomes a protected trust deed. This means that you are protected by law; your creditors can not take any legal action against you. It also means that they agree to freeze interest and that they accept the balance of the trust deed’s fund as final settlement. In other words: it means that if you pay the monthly amount you have agreed on, in three years you will be debt free. From now on, your creditors won’t contact you; in any case they will contact your Trustee, which is your Insolvency Practitioner. All you have to do is pay the monthly amount in time, and in three years you will be debt free. If you encounter financial problems, for instance you are sick or you become unemployed your monthly payments might get reassessed. But try to pay the agreed amount in time, this is the only way you can become debt free. After the trust deed is over, all your remaining debts are written off and you become a free person. Pay attention when you contact an Insolvency Practitioner! You should not pay him anything until the trust deed is signed, so if he asks for any kind of up front fees; consider looking for another company or Insolvency Practitioner!
Now let us see the advantages of a trust deed. There are some advantages I already wrote about: you won’t have to deal with your creditors, your trustee will. The biggest advantage is that you won’t lose your assets and you will make just one payment per month and the sum will be considerably smaller than before signing the trust deed. As I already said, after signing the trust deed, your creditors can not take any legal action against you; of course this is valid only until you make your payments in time. Compared to bankruptcy, a trust deed has some other great advantages: everything remains a personal matter; no one else has to know about it. Also, it won’t affect your career, you can hold public offices or you can be the director of your company. These are not possible in case of bankruptcy. The final advantage is that if you keep paying the monthly amount, you will become debt free in three years; the remaining part of your debts will be written off. Although your credit score will drop, you will be able to get credit again, although most people say that they won’t ever ask for a credit.
Now you know the whole process of getting a trust deed, you also know the advantages compared to bankruptcy. And you can not deny that trust deeds are a great alternative to bankruptcy. You can keep your assets, you will pay an amount of money you can afford and you will become debt free in a relatively short period of time. So if you find yourself in a situation described in the beginning of the article, do not hesitate to consider seeking professional advice from a qualified
trust deed advisor.
