Self Employed In An Trust Deeds

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Self Employed In An Trust Deeds

Self Employed In An Trust Deeds

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Self employed in an trust deeds? Applying for a trust deed means you would need around £150-£200 left from your monthly income to be able to make repayments to your creditors. While most FAQs say that you need employment to apply for such an agreement, if you are self-employed, the only thing that you need to do is to provide proof of income. The required proof often consists of six months worth of accounts. Sole traders whether they employ people in their business or not are considered self employed hence the two terms are usually used interchangeably in most websites that tackle debt management advice specifically deeds.

Entering A Trust Deed While Still Working Or In Business

Sole traders or those who are self employed have access to all debt solutions including filing for bankruptcy or applying for a trust deed. Under both of these solutions, sole traders can keep on operating in their business.

This is one of the major questions of sole traders because before, it was difficult to avail of repayment solutions. The Bankruptcy Scotland Act made it possible for self employed individuals and sole traders to enter into such voluntary repayment agreements whilst still being able to work or continue their business operation.

Your Equipment

While the insolvency practitioner will take a look at all your assets, you can keep all the equipment that you need to keep being in business. One has to keep in mind though that other assets that are not being used will be sold off to pay for the debts you incurred.

How It Works

To learn how this type of repayment arrangement works, it is important to understand what a Scottish Trust Deed is. Considered as an alternative for going bankrupt, this government legislation aims to help debtors repay the entities they owe monies to by paying monthly contributions. This kind of arrangement is much like the English Individual Voluntary Agreement or IVA.

One thing to remember is that this agreement only covers uncollateralised obligations such as credit card debt or debts stemming from a promise to pay by signing a document. What is good about this repayment solution is that those in debt can pay off a fraction of the amount of what they owe and can legally be debt free after the specified period of repayment.

However, before one can start paying a fixed amount monthly, there is a need for your creditors to approve your offer. If the offer is rejected, the deed will not be binding to your creditors.

It starts with contacting an insolvency practitioner and taking a look at options for the deed. The licensed professional will evaluate your income to see if you have enough disposable money to cover your debts. All your assets will be looked into as well.

Often, it takes one to two months for the deed to be drafted by a licensed insolvency practitioner. The agreement will of course be based on terms you agree on and the amount for the monthly payment will be what you can afford so that it will not cause any difficulties on your end.

Once everything is set, the deed agreement is given to your creditors. It would take a few weeks for them to review it. There is a possibility though that a creditor rejects the offer but keep a positive outlook because entering into such an arrangement is beneficial for both parties.

Repayment Period

Debtors often ask how long the repayment period will be. There is no definite answer to this question because it can vary from one debtor to the next but more often than not, the specified period in most deeds is 36 months or three years.

Debtors must ensure that they pay their monthly payments promptly. Once the specified period of repayment has elapsed, debtors can finally consider themselves debt-free.

As proof that one has already completed the deed, a certificate will be given to the debtor. And by then, you can get loans again.

Credit Rating

Another important question is how a deed can affect your credit score. While you are still fulfilling the terms of the debt payment arrangement, your credit rating will suffer but do not fret, because this is just temporary. Once the three years is over, you will finally be able to see your credit rating go up again.