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 struggle to get 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 favor.
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.
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