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i There are no up-front fees, and we won’t charge you for debt advice. Once your trust deed is set up, there will be fees set by your insolvency practitioner. Available in Scotland only.

Trust deed

Getting a trust deed. How to apply

When you apply for a trust deed, a specialist will check that you’re eligible and complete your application for you. StepChange Scotland is an organisation that’s trusted and authorised to help arrange trust deeds.

Wherever you live in Scotland, we're here to help you. We provide free debt advice tailored to your individual situation, in line with Scottish debt law. Find out more about StepChange Debt Charity Scotland.

A trust deed is a formal agreement available in Scotland where you repay an affordable monthly amount over four years. Once your trust deed is set up, you will make payments to your trustee or insolvency practitioner. At the end of your trust deed any remaining debt you haven’t paid back is written off.

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Considering a trust deed?

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Can I get a trust deed?

To be able to apply for a trust deed, you’ll need:

  • to have unsecured debts of at least £5,000, and
  • be able to make regular payments over a fixed period

A trust deed is similar to an individual voluntary arrangement (IVA) in England, Wales and Northern Ireland. IVAs are not available if you live in Scotland.

It’s important to get free and impartial debt advice before going ahead with any solution, so you can be sure you’re clear about the best options for your situation.

Trustees for trust deeds

You’ll need a specialist to manage your trust deed, called a ‘trustee’. You may also have heard them being referred to as ‘insolvency practitioners’.

Your trustee will look at how much you can afford to pay and whether your assets (items of value) will be sold.

You’ll normally have to sell any asset worth more than £1,000, but you may be able to exclude a property if there’s not enough equity (usually less than £20,000) in it. In some cases, you may be asked to release equity on your home or extend your trust deed by a year.

Your trustee will contact all of your creditors to explain how much you can pay, and if your creditors agree, your trust deed will become a protected trust deed (PTD).

Your trustee will run your trust deed for you and pay your creditors directly so that you don’t have to have further contact with them.

Your trustee will complete your trust deed application for you

  • Most of the work is done for you, though your trustee will need some information from you before they begin the application process.
  • When you've signed and returned the completed application to the trustee, they’ll send it to your creditors. It’ll be accepted unless more than half of your creditors object to it.
  • The trustee takes their fees and costs from your payments and from the sale of your assets.

Choosing a trustee: If you choose StepChange to help you manage a trust deed, we’ll recommend that you contact certain trusted trustees to help you.

Frequently asked questions about getting a trust deed

These are some of the questions our clients commonly ask us about trust deeds.

What debts are included in a trust deed?

A trust deed includes most unsecured debts, such as credit card debts, overdrafts and personal loans. Your trustee will discuss this with you.

If you have arrears on your household bills, such as council tax or utilities, the trustee will include them in your trust deed.

Some debts are not included in a trust deed. These include:

  • Mortgages
  • Student loans
  • Criminal fines
  • Fraudulent debts, such as benefit fraud
  • Child maintenance arrears - your child maintenance payments can't be included, this only applies to arrears, you’ll be expected to carry on making payments as normal

If you have any secured loans, you can ask for them to be included, but your creditors may not agree. Your trustee will advise.

How much does a trust deed cost?

There are no up-front fees for a trust deed if you use one of our recommended trustees. They’ll take their fees directly from your payments and then the remainder is shared among your creditors.

Ready to find out more about getting a trust deed? Get debt advice online now.

What happens at the end of a protected trust deed?

Your trust deed will usually run for four years. Once you’ve successfully completed it, all the outstanding debt balances included will be written off.

Find out more about how trust deeds work.

Will a trust deed affect my credit file?

Your trust deed will be shown on your credit file for six years. It’ll also be listed in the Register of Insolvencies, and you’ll find it harder to get credit in the future.

mum at the table with bills

Considering a trust deed?

We're here to help. Free, online debt advice available now.

Get debt help

Can you get a trust deed twice?

It is possible to get another trust deed, even if you’ve had one before, but you must have been discharged from the previous trust deed before you enter into a new one.

Can a trust deed be revoked?

You cannot cancel a trust deed once you’ve entered into it, but there is some flexibility if you’re having difficulty keeping up with payments.

The trustee may agree to

  • a payment break, on a temporary basis
  • extending the term of your trust deed
  • lowering payments, if the term has been extended

We always recommend speaking to your trustee if you’re struggling to make payments.

If you still find you can’t make the payments to your trust deed, the trust deed can be terminated. This will mean you’re no longer protected from action by your creditors to reclaim what you owe them.

In certain circumstances, your trustee could apply to make you bankrupt, if they believe this would be in the best interests of your creditors.

Can an accountant prepare a trust deed?

An accountant can prepare a trust deed for you, but only if they’re qualified (as a trustee). You will need to check this with your accountant.

What restrictions will I be under if I’m on a trust deed?

There are certain restrictions you’ll have to abide by while you’re on a trust deed. You must:

  • Tell the lender about your trust deed if you apply to borrow more than £2,000, either in your own name or jointly with someone else
  • Make sure you co-operate with your trustee. You can’t refuse to do so
  • Let your trustee know if your situation changes

Is a trust deed right for you?

For expert help use our free online debt advice tool to see whether a trust deed is the best solution for you.

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