Is it possible to get a bank account if you have a Trust Deed?
Finding the right debt solution for you will come with several advantages - not least knowing that you're getting out of debt at a manageable rate.
However, most approaches to problem debts come with some drawbacks too, particularly if you need to enter an insolvency solution such as a Trust Deed.
But how will entering a Trust Deed affect you when it comes to your banking options? Keep reading to find out.
What you need to know about Trust Deeds
A Trust Deed is a type of insolvency solution. It's available exclusively in Scotland for borrowers who have significant unsecured debts they can't afford to repay in a reasonable time.
A Trust Deed can only include unsecured debts - that is, money borrowed on things such as credit/store cards, catalogues and personal loans.
If you enter a Trust Deed, you will:
- Make one reduced payment per month, which will be affordable alongside your priority costs (such as rent/mortgage, bills & Council Tax)
- Prevent your lenders from taking any further action (they may get in touch, but can't legally pursue you any further for the debts once the Trust Deed is agreed)
- Be able to stay in your home (but if you're a homeowner you may have to release some equity during the Trust Deed)
- Have any included debt you can't afford to repay written off on successful conclusion.
A typical Trust Deed lasts for three years.
Can I get a bank account whilst on a Trust Deed?
One of the biggest effects of agreeing a Trust Deed will be the impact on your credit rating, which will be affected for six years.
As a consequence, it's likely you'll have difficulties opening a standard bank account during this time - as most banks will view a low credit score as an indication of a risky customer.
However, a basic bank account that doesn't require a credit check could be suitable - and give you a way of managing your money whilst your Trust Deed is up and running.
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