Debts and loans

Third, let’s make a careful study of the process. When the debtor makes a decision to go ahead with the Trust Deed, he has to inform the Trustee about everyone he owes money to. The borrower also has to specify how much money he can pay into a monthly arrangement and to give all the other financial information that might me needed. The Trustee will give a form of proposals to the lenders for approval and administer the Trust Deed.

Forth, let’s name the advantages of a Trust Deed.

1. the stress caused by the debts will be reduced because all correspondence will be handled by the Trustee;

2. a Trust Deed is usually more flexible and costs less than sequestration;

3. it gives an opportunity to the debtor to hold certain public offices - which is impossible with sequestration;

4. the companies will be able to continue trading;

5. all the information is not published (in contrast to sequestration).

And finally let’s find out what happens to the borrower when he signs to a Trust Deed?

The debtor makes a contract according to which he will repay all his debts, usually at a reduced rate. After the making of the contract, the borrower agrees to the next points:

1. first, he agrees to co-operate with the Trustee;

2. second, he agrees to pay the monthly contribution;

3. third, the debtor will not take any other credit.

First, let’s find out what is a Trust Deed.

A Trust Deed is a special method which can help the debtor to repay his debts during a specified period of time. It is well-known that all monthly payments of the debtor are based on the sum of money that he can afford to pay off, and after the period of the arrangement, all remaining debts will be written off. Thus, a Trust Deed is a legally binding agreement made between the debtor and his creditors. In this case, the debtor agrees to repay what he can afford for a period of time, which is agreed by the debtor and the creditor (as a rule 3 years). The creditors agree not to take any legal action against the debtor. That means that they will not contact the debtor about his debts, and all of his remaining debts will be written off after his Trust Deed is successfully done.

Second, let’s see how it works.

First of all, the debtor has to contact the advisors and tell them about his debts, about his income and his expenses, and they will take into consideration his essential expenses and analyze how much money he can afford to pay his unsecured creditors. Then they will find out if the creditors will agree with the proposal. The Trust Deed will become protected by the law only if there will be objections from more than half of the creditors of the debtor or from creditors who have more than a third of the debtor’s unsecured debt between them.

Every debtor has to remember that the Trust Deed will not fail as long as he does all the payments. And in 36 months he will be free from debts.

There are three parties of the deed of trust. Here they are:

1. first one is the Trustor, that is the borrower;

2. second one is the Trustee;

3. the third one is the Beneficiary, that is the lender.