Does a Trust Deed Affect Employment? - Carrington Dean stars-five-icons

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31.10.2018

Does a Trust Deed Affect Employment?

A Trust Deed is a formal debt solution available in Scotland that allows you to pay off your debts with an affordable monthly repayment, with the remainder of the debt being written off at the end of the repayment term. It usually lasts for 4 years, however, a longer period can be considered depending on your circumstances.

A Trustee will act on your behalf and pay your creditors with your monthly contribution. Although equity may need to be released from your assets, the main benefit of a Trust Deed over sequestration (bankruptcy) is you won’t be asked to sell your home.

Trust Deeds and employment

To enter a Trust Deed you will need to be employed as you will need to have a disposable income of roughly £150 – £200 to begin making payments towards your arrangement. You can’t pay your Trust Deed using the money you receive from benefits.

There are many benefits to a Scottish Trust Deed as it avoids the stigma which comes with formal bankruptcy and there are no investigations or selling of your assets.

However, you might worry about how a Trust Deed will affect your current career or future job prospects. You may also worry about the embarrassment of having your employer know you are having financial troubles. You might also fear your employer will judge or fire you for being in a Trust Deed.

These fears are perfectly normal so with this in mind, does being in a Trust Deed have any effects on your career?

Does my employer have to know I have a Trust Deed?

It is very unlikely your employer will find out are in a Trust Deed as you don’t usually have to tell them, unless your employer is one of your creditors, or you are in a profession where it is stated in your terms and conditions that you are not allowed to enter any form of insolvency arrangement.

If your employer does question you about being in a Trust Deed, the best idea is, to be honest with them. You may feel awkward and embarrassed admitting it to them however it highlights that you are seeking help with your debt problem.

Are their certain jobs that don’t allow you to have a Trust Deed?

Some professions will state in your contract of employment that you are not allowed to be insolvent or have been sequestrated. Usually, any jobs where you have responsibility for handling money or are in a position of trust, such as a member of the Police or a solicitor.

If you have a profession where you think it might be an issue entering into a Trust Deed you should check your employment contract before going ahead with any type of arrangement. This will be in the form of a ‘restrictive covenant’ clause in your contact. If you are unsure you can contact a financial advisor who will be able to help.

Could I lose my job if I have a Trust Deed?

It is highly unlikely that you would lose your job for entering into a Trust Deed as long as it doesn’t impact your ability to carry out your job. If you are in a profession where it is stated in your terms of employment that you can’t be insolvent, then it is vital you speak to someone so you can receive advice on your options.

Can having a Trust Deed affect me being able to get a job?

Again, if you are applying to a professional position you may be vetted beforehand and if you are in a Trust Deed you may be deemed unsuitable for the role.

For any other jobs where no financial vetting procedure takes place, there is no reason you need to inform your prospective employer of your Trust Deed and it shouldn’t affect your ability to get the job.

If you would like to discuss in more detail the effect a Trust Deed could have on your employment you can give one of our expert advisors a call on 0141 326 0425.