What if your debts keep going up?

For those in deep financial trouble there will come a point, a tipping point, when you are unable to finance your debts and cover your basic cost of living. Indeed in this situation you may see your debts continue to increase purely and simply because of penalties, fines and interest charges. But what you do if your debts keep going up?

Debts keep rising under a trust deed

In Scotland there is a trust deed service available which effectively allows you to put together all of your debts, your assets and your income and an appointed trustee will effectively take control of your financial life. They were put together a repayment plan where applicable and they will also monitor your spending on an annual basis although you are legally obliged to tell them of any significant changes in your finances at any stage.

If under the trust deed you see your debts continue to rise, despite the fact that your reported debts will be frozen when the trust deed is confirmed, there is something wrong.

Are you taking out more credit when in a trust deed arrangement?

One of the main gang planks for any trust deed, and indeed any financial arrangement, is the restricted access to credit during the time when you are trying to sort out your finances. If your debts continue to rise despite the fact you are in a trust deed then you are either spending more than you are bringing in, extending your budget beyond that agreed with your trustees or you have taken out further loans or credit which have not been disclosed. If this is the case it is imperative that you contact your trustees as soon as possible and try to work out a way forward.

The whole point of taking out a trust deed is the fact that a line is drawn under your debts and there will be no more penalties, no more fines and no more interest charges. If you are seen to be abusing this particular service then you will be in serious danger and may be forced to look at other alternatives.

Living within your means in a trust deed

Just because you have taken out a trust deed and your finances are effectively controlled by a court-appointed third-party this does not mean you cannot live a life. The trustees are more than happy to allow you to put aside income to cover your everyday expenses but they will not allow you to live an extravagant life or gamble. You need to be seen to be doing your part with regards to this debt repayment arrangement and if this is not the case then it will be taken out of your hands.

It is worth noting that while the trustees will assist you as much as possible they also have an obligation to creditors who have agreed to write off a significant amount of debt in relation to the trust deed arrangement. It is this duty to creditors which ensures that you must inform your trustees of any changes to your financial situation as soon as it happens because if they find out via third parties they will penalise you and you are strictly speaking breaking the law.

Speak to your trustees on a regular basis

The trustees of your trust deed will be in regular contact with you although in reality they should not need to meet you more than once a year. You may well be contacted to arrange a meeting to discuss your finances, your income, your expenses and any changes which may have happened over the last 12 months. In many cases this is just a case of rubberstamping an ongoing service and an ongoing situation and there are unlikely to be major changes to any repayments you are obliged to make. They will go through the traditional questionnaire which is required by law and they will ask questions about your standard of living and your expenses.

If you have any questions about credit, financial arrangements or even debts which have arisen after the original trust deed was created, you need to contact your trustees as soon as possible. They’ll know exactly what to do in any situation and when you consider the pressure and the strain you had probably been under it is very beneficial to contact third parties who know what they are talking about. There is no point in worrying over something which is out of your control when there are trustees available to give you on the spot advice.

Trying to work out your monthly expenses

For the vast majority of us it will be almost impossible to sit down today and jot down our monthly expenses to the nearest £50. The truth is that our monthly budget and our monthly expenses do change from month to month and taking account of all of these changes is not easy. However, the trustees associated with the trust deed service in Scotland have experience in putting together monthly budgets for those in financial trouble.

They will know roughly what you would spend on clothing, electric, gas, petrol, heating, food and other everyday expenses whether you are single or perhaps part of a larger family. They will not expect you to live a life where you have nothing in your pocket but they will again not expect you to live an extravagant lifestyle and fritter away any income you earn in the future.


If after arranging some kind of debt repayment scheme you find that your debts continue to rise then either you are spending more than you agreed with your trustees are you have not confirmed all of your debts. Either way if you are finding it difficult to cover any prearranged debt repayments then you do need to speak to your trustee sooner rather than later and inform them of your changing situation.

Remember, while the trustees have an obligation to the creditors they also have an obligation to debtors and they will do everything in their power to help you. But you need to play your part and inform them of any changes as soon as they happen.

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