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What to Do After Your Trust Deed Ends

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Once your trust deed has come to an end, you’ll receive a formal discharge letter from the trustee and your details will no longer be on the Register of Insolvencies.

Trust deeds usually last for three or four years and once the time period is up, any unsecured debt included in the agreement that remains is written off. Your creditors can’t chase you for these amounts – they also can’t pursue you during the term of the agreement either. There’s lots of information online if you want to find out more about trust deeds.

You’ll feel free, so keep up the good work

You’ll feel like you’ve really achieved something, and you really have. Being in debt is scary and many people despair of getting out of it, so you should be proud of yourself. It takes dedication to pay off large debts and now you’ve freed yourself, you need to look to the future.

You need to check your credit file to make sure it’s been updated

When you enter a trust deed, which is formal insolvency, your credit rating takes a beating. Your trust deed will be on your file for six years after it starts, so you need to ensure that the credit reference agencies know yours is over. This means that when the six years are up, it’s removed from your file.

Usually, this deletion happens automatically, but you need to check with the three main credit check agencies to make sure it’s been marked. If this doesn’t happen within three months of the end of the agreement, you can write to your creditors to request the necessary notifications.

You need to rebuild your rating

You won’t have been able to borrow any money during the term of your trust deed – it’s one of the conditions – and formal insolvency does affect your credit rating badly.

When you apply for credit again, you may see that your interest rate is higher than normal to reflect the perceived risk on the part of the lender. You can rebuild your credit rating, though.

You can apply for a credit-builder credit card. These also have a high rate of interest, but if you pay off your debt each month, on time and in full, you’ll be showing you can be trusted. Eventually, you’ll be able to apply for mainstream cards with lower interest rates.

Prepaid cards are also very useful because you can use them in the same way as credit cards, but it’s your own money you’re topping them up with. The credit reference agencies find out that you’re topping your card up regularly, which works in your favour.



You can save the money you used to make your trust deed payment

This makes great sense because you’ve been managing well without it for a while, so why not invest it in your future? You don’t have to invest or save the whole amount if you want to have a bit more disposable income, but as long as you’re saving something, it’s all good. You’re building up a cushion of savings that will help to protect you from debt in the future.


The Best Money Tips For New Graduates

Graduating from college is a milestone that leaves many students overwhelmed with finding a new career, managing monthly expenses and paying off student loans. Finding a solution that allows you to manage your money wisely is the best way to start a new career, and an independent lifestyle, without accruing more debt than you can handle. Learning which steps to take to create a new home and new life, and which to avoid, helps you avoid some of the most common mistakes that new graduates make.

Prioritize Your Spending

Setting up a new apartment is one of the first steps that you will take after college. It is important to take the time to decide which items you really need to purchase, and which can wait a little longer. For example, you will need furniture, but a top of the line television is a luxury that you can put off until you are a little more financially secure.

It is also important to look at your weekly budget for food costs and entertainment. Setting a budget for food, drinks with friends and other non-necessary expenses can save you thousands of dollars a year. You can also take the time to learn new skills, like cooking, that can help you stretch your money. Cooking meals at home is one of the simplest and most effective ways to cut spending.

Use Debt to Your Advantage

Debt isn’t always a bad thing to have. A manageable amount of debt can be an advantage when you make payments on time. Making payments on time allows you to begin building your credit score, which will assist you in buying a new home or car in the future. Just make sure that you only take out loan amounts that you can comfortably manage to ensure you aren’t overwhelmed by the monthly payments during the first months after graduation.

Start Saving

Saving can seem challenging to new graduates but this step is one that you shouldn’t skip. Even a small portion of your income can make a big impact on your retirement or emergency fund over the course of several years. Start by investing about two percent of your income into a savings account that is set aside for emergencies, such as unexpected car repairs, then switch to investing in your retirement account. You may want to research your options before choosing an investment account to find the best returns on your investments.

Get Organized

One unexpected aspect of being financially independent in keeping up with and organizing paperwork. Choose to use online statements and automatic payment options whenever possible to help reduce the amount of paperwork you need to organize at home. Not only will paperless options cut down on clutter, automatic billing and payments taken directly from your account ensure you make payments on time without the hassle of sending a check.

By planning your finances carefully and prioritizing spending, graduation can be an exciting adventure instead of a financially stressful event. Begin planning your financial future early to be confident that you are prepared for your new life as a recent college graduate.

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Daniel Ramos is working for Garden Savings bank. He loves to blog and offer people advice on their personal financial issues. When he is not blogging, he enjoys writing for his own finance blog.


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