A trust deed is a legally binding arrangement where you make reduced payments over 3 years. At the end of this time your debts are written off.
They are only available in Scotland. If you live in England, Wales or Northern Ireland, you may be able to apply for an individual voluntary arrangement, which works in a similar way.
A trust deed is a form of insolvency, so your unsecured debts need to outweigh the value of your assets, such as a house or vehicles. Unsecured debts include things like credit card debt, personal loans and store cards.
How a trust deed works
With the help of an Insolvency Practitioner (IP) you make an affordable repayment to your creditors over a 3 year period. At the end of this time any remaining debt you have is written off.
You can’t set up a trust deed without an IP (they are known as your 'trustee'). The IP acts on your behalf to draw up a proposal and holds a creditors meeting to get the proposal accepted. They will also help and support you throughout the arrangement.
If your creditors agree to this repayment amount your trust deed becomes ‘protected’. This means they won’t chase you for payment or add any more interest and charges to your debts, and they can’t take any court action.
An IP will normally take a charge for their service out of your monthly repayment, so it’s important to shop around and find the best one for you.
Advice on trust deeds
Trust deeds are a specialised area of advice, to make sure it’s the best solution for you, use our online Debt Remedy tool. We’ll provide you with a tailored budget and the best solution to help you deal with your debts.
If you’d prefer to talk to us, call our free Helpline on 0800 138 1111 and you can speak to one of our highly trained Scottish debt advisors.
If a trust deed is the best solution for you, we'll take the stress out of finding an IP and give you details of the best firms available.