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i This solution is only available in Scotland.

Protected trust deed. Is it right for you?

A trust deed is a legally binding arrangement in Scotland where you make reduced payments over 4 years. At the end of this time, your unsecured debts are usually written off.

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.

Trust deeds are only available if you live in Scotland. If you live in England, Wales or Northern Ireland, an Individual voluntary arrangement (IVA) is a similar solution, but it’s important to note that it has different benefits, risks and fees associated with it.

Trust deeds at a glance

Benefits Risks
With the help of an Insolvency Practitioner (IP) you can make an affordable repayment to your creditors over 4 years. After this time any remaining debt is written off. An IP normally takes a charge for their service out of your monthly repayment, so it’s important to shop around and find the best one for you.
Once your trust deed is approved, your creditors won’t chase you for payment or add more interest and charges to your debts, and they can’t take any court action. A trust deed may affect the terms of your employment; you should check your contract or speak to your HR department.
While you may have to sell some assets, you’re usually able to keep one vehicle as long as it’s worth less than £3,000 and is essential. There's the risk of bankruptcy if the trust deed fails.
Although a protected trust deed is a formal debt solution, you don't need to appear in court. Your credit rating will be affected for six years, starting from the date the arrangement is agreed.


Things to consider

Deciding to enter into a trust deed is a big commitment. There are a number of issues to think about, including these points:

  • A trust deed is a legally binding agreement between you and your creditors
  • Provided you comply with the terms of your protected trust deed, your creditors cannot take further action to recover the money you owe or to make you bankrupt
  • You’ll need to check if it’ll affect your job. A trust deed is a form of insolvency and having one can lead to disciplinary action or dismissal in some jobs, such as those in financial services or the legal profession
  • If you're granted a trust deed and you rent your property your landlord may terminate your tenancy agreement
  • If you’re a homeowner you may have to release equity from your property
  • You’ll will have to pay any surplus income you have, after your essential living costs are paid, into your trust deed for four years
  • You must inform the trustee if your personal or financial situation changes, for example if you inherit some money, or you lose your job
  • Only the debts included in your trust deed will be written off at the end of it. If the trust deed fails, there’s a risk of bankruptcy
  • You’ll have to pay a fee for the services of the insolvency practitioner running the trust deed. This fee is normally deducted from your payments.

How will a trust deed affect me?

A trust deed should be carefully considered because of the possible consequences for your personal, professional and financial life. These include the following:

  • You'll have to keep to a budget for the full term of your trust deed: usually 4 years.
  • In addition to your employment, a trust deed can also affect any hire purchase agreements you might have.
  • Your details will also be added to a public register, called the Register of Insolvencies (ROI), for a period of five years. The register is maintained by the Accountant in Bankruptcy (AiB) and is available for viewing by the general public. It contains all details of current protected trust deeds.
  • There will be restrictions on your spending during your trust deed. You’ll have to stick carefully to a budget to ensure you can afford the monthly payments. 
  • There is a charge for the services of an insolvency practitioner, but the fees are deducted from the trust deed fund. This is the total amount of money you are able to offer your creditors and is made up of your monthly payment (over the agreed term) and any assets or equity included.

Who oversees my protected trust deed?

You can’t set up a trust deed without an IP (they're known as your 'trustee'). The IP draws up a proposal and will also help and support you throughout the arrangement.

If you’re recommended a trust deed, you'll be referred to one of our four trusted third party organisations: KPMG, Campbell Dallas, French Duncan or Grant Thornton UK. One of these organisations will set up and administer your trust deed.

Alternative debt solutions

While a trust deed may be the correct solution to your financial situation, there are some other options that you might want to take a look at:

Advice on trust deeds

Trust deeds are a specialised area of Scottish debt advice. If you haven't already received advice from us, 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 Helpline on 0800 138 1111 (free from all landlines and mobiles) and you can speak to one of our expert 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.

Trust deed FAQs

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  • Our help is FREEWe won’t charge you a penny for the help and support we provide while you apply for a trust deed.
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