What is a Trust Deed?
Trust deeds are legal documents which state that someone owns part of a property and has the right to sell it. This is generally a more flexible approach to ownership than mortgages, and can provide an income stream. In some cases, a trust deed can also help with estate planning.
Essentially, a trust deed transfers the ownership of a piece of real estate to a trustee. The trustee is an impartial party, such as a bank, title company, or an escrow company. If the owner of the property passes away, the title will automatically pass to the surviving party.
Trust deeds are most commonly used in the states of Alaska, Illinois, Missouri, Nevada, North Carolina, Tennessee, and Texas. However, they are used in many other states, too. It is important to make sure that you understand the details of your trust deed before signing it. You should consult a lawyer or an attorney to ensure that your deed is correctly drafted. Often, it will be possible to change the terms of your trust deed to reflect changes in your situation.
Trust deeds are also a viable option for dealing with debts. The process is less formal than bankruptcy, and creditors are typically required to communicate with a trustee instead of a court. A trustee can then decide whether to sell your property and pay the creditor, or to reduce your payments temporarily.
You can get a trust deed to deal with your debts by making an agreement with a trustee. These agreements will have some advantages, but there are a few disadvantages as well. For example, you cannot use your trust deed if you are receiving benefits. Similarly, you can be ineligible to become a director of a limited company if you do not have a trust deed. There may also be rules about holding public office in some states.
Another advantage of a trust deed is that it can allow you to continue to be employed. However, you may still be required to give up your position if you receive benefits.
Debts that are included in a trust deed are frozen at the beginning of the arrangement. This means that they will not accrue interest or write off. Once a set period has passed, all of the debts will be written off.
Some debts are excluded from a trust deed, such as student loans. There are also some legal restrictions, such as the Consumer Credit Act 1974. To comply with this law, creditors are required to send out arrears notices and annual statements.
When you set up a trust deed, you must follow the laws of your state. Many states require that you use a trust deed instead of a mortgage. As a result, your credit reference file will be impacted. Although a trust deed is a great way to secure money in the form of a home loan, you should consider your options carefully before signing a trust deed.
What is a Trust Deed? was first seen on Debt Worries