subject: Calculating A Protected Trust Deed Monthly Payment [print this page] Calculating A Protected Trust Deed Monthly Payment
It is not uncommon for people to avoid addressing their debt issues. A Scottish trust deed could be the answer, however, many individuals are reluctant to use this route because they assume they will not retain on to enough money to exist on after the allocation to the fund is determined.
In reality all good Scottish trust deed providers will aim to put together an allowance that is both acceptable to creditors (who want the return of a portion of the money owed to them) and manageable for their client (so that the agreement is sustainable). A fair balance needs to be found. Generating such an agreement between a debtor and his or her creditors is a key part of the role of an insolvency practitioner in Scotland.
You should not commit to a trust deed agreement until an appropriate budget has been determined. The fear of being unable to pay for necessities decreases as the established monthly repayments take into account the cost of food and living.
Some trust deed providers will try and manipulate the outgoing figures so that a trust deed seems like a reasonable option for an individual, when in actual fact it is not. Therefore consideration should be taken when deciding on a trust deed company or intermediary.
The basic equation for determining the trust deed payment is to subtract all legitimate expenditure (excluding unsecured debt repayments) from total income (including benefit income as well as earned income).
There are a multitude of outgoings that would be considered "reasonable" expenditures, e.g. rent, water, light and heat, fuel etc. Occasional costs such as MOTs, repairs on your home and emergency expenses would also be viewed as "reasonable" costs.
The debt advice industry has specific guidelines that define "reasonable" expenditure and this applies to all debt providers not just those who offer trust deeds. Within the guidelines there is a range of acceptability for purchases like uniforms, food and socialising, whereas expenses such as rent and council tax are nearly always authorized.
The conclusion should be that the Scottish trust deed instalment demonstrates to creditors that the debtor is prepared to repay as much as they realistically can towards the debts, while maintaining that the individual financial needs of the debtor are covered for the fixed length of the trust deed itself.
Everyone who is asked to make a trust deed payment that they do not believe to be manageable is advised to refuse to sign the documentation and seek additional advice elsewhere before committing.
welcome to Insurances.net (https://www.insurances.net)
