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How Trust Deeds In Scotland Are Related To Property Assets

Many people who are considering Trust Deeds will be concerned at how property is affected.  Many homeowners worry that the house may be lost in the process.  When a person owns the home, there is a high probability that a mortgage was paid for many months, and the property was well maintained.  Because of poor financial management, this may be all down the drain.  If a person rents property, it may become worrisome that a landlord will become worried and the relationship will be ruined.  This article should answer the most common questions that a person has about Trust Deeds and property assets.

Is a landlord always contacted and informed if a renter begins a Trust Deed in Scotland?
A landlord does not need to be told anything about a renter's financial status.  Unless a rental agreement specifically states that a person must inform a landlord of such action, the landlord can remain separate from the situation.  However, if a person decides to move and a rental agency requires a credit check, the Trust Deed will definitely show up and may lead to trouble.  Most landlords refuse to deal with renters who are part of this type of agreement.

Just because a person lives with his or her parents, does the property become compromised by Scottish Trust Deeds?
There is nothing that gives automatic rights to creditors regarding other people's assets.  Unless a child's name is on the home's deed with the parents, the house cannot be touched.  A Trust Deed is only based on assets of the person that is applying for it. 

What Choices Are Available to Homeowners when entering into a Trust agreement?
A basic homeowner will have two choices.  When there is an unprotected Trust Deed Scotland, a person does not have to transfer property to a Trustee.  It can be requested that it be left out of the agreement.  However, creditors may not be pleased with this action, especially if there is a great deal of equity available in the home.  When this occurs, the creditors may refuse to sign off on the agreement and begin a petition for sequestration.  This is why it is always necessary to be truthful when applying for  Trust Deed.

The next choice for a homeowner is to make sure that all Scottish Trust Deeds are protected.  This means that a creditor cannot chase an individual for money.  However, for this to occur, a person must transfer the property rights to the Insolvency Practitioner.  This is the person who decides how the property will be used.

How Will Property Be Used To Settle Creditor Debt?
A homeowner will have an Insolvency Practitioner value the property at the start of a Trust Deed application.  If enough equity exists, a figure will be calculated that is a fair reflection of the amount that should be paid to lenders based on a redemption amount. This number can be due immediately or held until the end of the process.  However, the property may need to be re-evaluated if the value has risen over the time period.

What Happens If The Property Has Two Owners?
If a person has joint rights to property, the IP will need to get permission from the other parties involved with ownership before a Scottish Trust Deed can be established.  There will also need to be permission from people who have the right to live at the property. If one of these people refuse, the IP may force a sale division through a court case.  This means that all owners are given a fair shale or the proceeds after the home is sold.  Creditors receive the debtor's share.

What Happens If There Is More Than One Property?
The sale of the second property will depend on the opinion of the IP and the level of equity that is available.  If there is a great amount of equity in a second property, it is most likely to be sold as part of the agreement.  If not, the property may be able to escape the agreement.

What If There Is No Equity In Owned Property?
If a person has under £5,000 of equity in property, the IP may still wish to transfer the property into their holdings. This is done in case the property has increased in value at the end of the agreement. If a person does not want this to occur, it is possible to use a payment method to buy out the IP's interest.  This amount of money can be paid by anyone related to the person who owes money. This money can also be added to the monthly payment of the Trust Deed.

What Happens If The Trustee Is Bought Out And Returns At The End For More Equity?
When the interest is bought out, protection is made against this situation.  It is not legal for a Trustee to return and ask for more money when adequate compensation has been awarded. 

Is It Possible To Add Mortgage Debt Into A Scottish Trust Deed and Still Get To Remain In the Property?
This would be very convenient, but it cannot happen. Mortgage debt is secured. Only unsecured debt can be included in this type of agreement. This is because a person does not have outright ownership of the asset. The lender also owns a piece of the property until the mortgage is paid off.  It can be repossessed when payment default has occurred.

Cars, white goods, and consumer goods are also omitted from this list. All of the above questions should help a person understand that it is wise to understand the process and the items that can be kept and the items that will be lost.

 

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