Five Things To Ask First
I recently explained in a blog how the Scottish Government were taking action to stop the human trade of debtors in the Scottish Protected Trust Deed market.
They have now released regulations that will take effect from the 28th of November.
It’s hoped these regulations will prevent such lead generation firms targeting financially vulnerable debtors and selling on their details to other firms, sometimes for as much as £2,000.
The problem is so bad, Glasgow MSP, Bob Doris, recently highlighted the issue in a speech in the Scottish Parliament and called on the Scottish Government to go further and create an approved scheme for such firms, so they are better regulated.
The problem is when such middle men are receiving such lucrative fees, how can anyone be certain they are receiving “best advice”.
Other possible debt remedies don’t earn them the same kind of money, so there is an incentive for the less scrupulous to wrongly advise.
So if you are thinking of signing a Protected Trust Deed, ask yourself some questions first.
How do you know a Trust Deed is the correct solution?
If you have not yet had advice from a money adviser, how do you know a Protected Trust Deed is right for you?
Keep an open mind.
Protected Trust Deeds are only one option. There are others and some less severe.
Are you speaking to the correct person?
If you have not spoken to someone, make sure you do speak to someone who is reputable. If they are not a licenced insolvency practitioners, a Citizen Advice Bureau or your local authority, ask them for their consumer credit licence number.
Only licenced insolvency practitioners can actually sign you up for a protected trust deed, so deal with one directly – miss out the middle man.
Alternatively, contact your local free advice agency.
If you have been contacted by someone offering you a Protected Trust Deed, ask if they are actually insolvency practitioners. If not, say no thanks.
What happens to your home?
If you have been advised to sign a Protected Trust Deed and you are a home owner, ask what will happen to it.
Trust Deeds are a form of insolvency, so your Trustee acquires a right in your home when you sign. This does not necessarily mean your home will be sold or that you will have to leave it, but you have to be sure before your sign. A reputable Trustee will tell you before you sign how your home will be dealt with.
They will also tell you what is expected of you.
Is it affordable?
If you cannot afford for the next three or four years to pay what is being asked of you, you may be making your situation worse.
If you sign a Protected Trust Deed and then stop paying, the Trustee can hand you back all your debts, plus interest . You could end up owing more than you started with and lose the money you have paid in.
If it is not affordable there may be other solutions.
Ask about Bankruptcy and the Debt Arrangement Scheme. These may be viable alternatives.
Set up fees
If you are being asked to pay a set up fee, refuse.
Never agree to pay money to setup a Protected Trust Deed, they can be set up quickly and you should not have to pay anything until it is protected.