What is a Scottish Trust Deed?

A trust deed is a formal solution only available in Scotland and shares similarities with an IVA. For example, they are both agreements between you and your lenders where – at the end of the arrangement – you’ll write off any remaining debt.

If you’re struggling to see a way out of serious debt, having to juggle demands for repayment, and wondering how life is ever going to return to normal, then a trust deed could be one such solution to getting back in control. Here, we explain just about everything you’ll need to know.

A trust deed is exclusive to Scotland

Trust deeds are only available in Scotland and, as such, we can’t help you set up this option. Still, if you live in England, Wales, or Northern Ireland, we could assist you with an IVA.

We’ve explained just about everything you may need to know about Trust deeds here. If you’re based in Scotland, we hope this information helps you on the path to financial freedom.

What is a trust deed Scotland?

A trust deed can be a great solution for dealing with unmanageable debts. A formal agreement between you and your creditors, it helps you control your finances through regular repayments over a fixed period.

When the trust deed is completed, any remaining debts are written off. One difference between this though when compared with an IVA is that your assets might be at risk with this debt solution.

With IVAs, on the other hand, your assets are protected.

If you’ve just moved to Scotland, you’ll need to wait at least six months before you can apply for a trust deed.

Do I qualify for a trust deed?

Although the qualifying criteria for a trust deed varies between insolvency practitioners, you should qualify providing:

  • The total value of your debts exceeds £5,000.
  • You have a reliable source of income to make regular contributions towards your debts.
  • You have sufficient assets - such as a house, savings, or car - which could be sold to raise money for your creditors.

How to set up a Scottish trust deed

Trust deeds are managed by specialist individuals known as insolvency practitioners and you’ll have to find one of these individuals to make the trust deed official. During the application process, these professionals work with you to organise such aspects as a repayment plan and determine the length of the trust deed itself.

Usually, this person will then become a ‘trustee’. The trustee can act on your behalf regarding your financial affairs. He or she will, in turn, notify your creditors and attempt to gain their approval for the trust deed to become ‘protected’.

The differences between an unprotected and protected trust deed

Where possible, a trustee will strive to grant a trust deed ‘protected’ status. In this situation, the agreement is binding on all parties and creditors cannot take steps – such as sending bailiffs or looking to make you bankrupt – to recover funds.

When the trustee seeks approval from creditors, at least 50% must agree to the terms for the trust deed to become protected. Should this not occur, the agreement instead becomes unprotected. As a result, the trust deed has no legal standing.

However, this situation is quite unlikely to occur. Providing the terms of the trust deed are reasonable and offer clear benefits to your creditors, it will usually gain protected status.

According to the Debt Support Trust, more than 1,000 trust deeds are taken out every year.

Trust deed pros and cons

Similar to other financial solutions, a trust deed has a variety of pros and cons. For example, a protected trust deed has the following benefits:

  • Creditors can no longer contact you regarding your finances. Instead, all communications have to go through the trustee.
  • The trust deed stops enforcement action, such as bailiff visits.
  • Once the trust deed has been completed, typically after around four years, any remaining debts will usually be written off.
  • Your debts are repaid through manageable monthly payments.
  • Unlike bankruptcy, a trust deed does not stop you from applying from certain types of employment.

However, protected trust deeds also have the following negatives:

  • Your credit rating will be affected and you may find it harder to obtain loans or other financial products in the future.
  • You may have to sell your assets – such as your home and car.
  • You’ll have to budget carefully to ensure you can always make the payments on a trust deed.
  • If you don’t cooperate fully with the trustee, they can apply to make you bankrupt.

How to obtain a trust deed Scotland

If you live in Scotland, and want to regain control of your finances, a trust deed could be the best solution for you. If you want to discuss this option more, or to find out more information about a similar solution called an IVA, get in touch with our team through the button below:


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  • On average, we write off £13,500 per client.
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