If you're a Scottish resident having trouble meeting the demands of your creditors, you may qualify for a Trust Deed.

You may, under Scottish Law, qualify for a Protected Trust Deed, which is a legally binding agreement that provides Scottish residents with a way to write off their debts based on what they can afford.


What is a Trust Deed?

A Trust Deed is a voluntary agreement between a debtor and their creditors (the people they owe money to) to repay part of what they owe.

The Trust Deed is put together and managed by a Trustee who must be a qualified insolvency practitioner.

When handling Trust Deeds the insolvency practitioner is regulated both by law and their regulating professional body.

What is a Protected Trust Deed?

To become binding on all creditors, a Trust Deed in Scotland must become “protected”. This is achieved around five weeks after a Trust Deed has been signed provided a significant number of creditors (or a single creditor owed a significant amount of money) does not object to the arrangement.

Once your Trust Deed becomes protected, creditors can take no further action to recover the money that was owed or take legal action in Scotland against the debtor.

Things to consider...

  • A Protected Trust Deed will generally last for four years.
  • Any new debts taken on after entering a Protected Trust Deed would not be protected against in the same way.
  • You can choose which Trustee to use (a Trustee is the Insolvency Practitioner at the firm you choose who is responsible for your case). Trustees are expected to provide advice on alternatives to a Trust Deed. The reason for this is that entering into a Trust Deed in Scotland is a serious step to take and has consequences that the individual considering this course of action must take into account when making their decision to proceed.
  • Individuals in certain types of profession may not be able to enter into a Trust Deed without jeopardising their professional status. The firm handling your Trust Deed should make you aware if this might be a risk to you. People who are concerned about this may wish to check their contracts of employment, speak to their HR department or Trade Union, or consult with their professional body if they have one.
  • A Trust Deed tends to be accepted by creditors where no realistic alternative exists and where they consider that the debtor is doing their reasonable best to repay what they can realistically afford via the Trust Deed.
  • As part of entering into a Trust Deed your Trustee will take control of any significant assets that you own. Most typically this will refer to your home. If there is equity in your home this will need to be realised at some point during the Trust Deed. You should seek written clarification as to how this could be achieved from your Trustee prior to signing the Trust Deed.
  • Other assets (such as a vehicle) may also be included in some way in a Protected Trust Deed. Once again we recommend that you insist on receiving a written record of how this will be dealt with before signing a Trust Deed.

Frequently Asked Questions

Trust deeds are formal and legally binding arrangements, which allow you to make regular payments towards your debts for a fixed period of time. At the end of the period any remaining debts are written off and you are debt free again. It is a voluntary but legally binding agreement by which a person conveys his or her property to a trustee to be administered for the benefit of creditors and the payment of debts.
One of the advantages of Scottish trust deeds compared to debt management plans is that you only need two thirds of your creditors to agree to it for it to become binding on the others. This can be very useful if you have one of two creditors who are unwilling to co-operate with your efforts to tackle your debt. If you were trying to set up a debt management plan, which is an informal arrangement, you would not be able to include any creditors who did not agree to it. With trust deeds any such creditors would be legally obliged to take part, provided that creditors for at least two thirds of your debts agreed. The two thirds relates to the monetary value of your debt, not the number of creditors. For a single creditor to prevent you setting up a trust deed they would have to be owed over a third of your entire debt.
It depends on what you can afford. Trained staff will work out a monthly payment plan with you and help you to appoint a trustee.
Your trustee deals with your creditors and will take the necessary steps to have your trust deed protected. Interest charges are frozen. Your trustee then receives a monthly payment from you and administers it for your creditors.
No. Once the Trust Deed is protected you shouldn't receive any more payment demand letters or calls from your creditors.
There is no pre-determined level of debt required. Every Trust Deed is specific to the individual's personal circumstances.
Yes, but you must tell your trustee about changes in your financial circumstances.
Usually 48 months after which you will be fully discharged from your debts.
It may affect your credit rating, although creditors may have already recorded adverse findings against you.
No. Trust Deeds are personal arrangements
No. It is a legal process where your income is assessed and an affordable payment plan is created.
Yes. Trust Deeds have become a recognised and popular method for individuals to deal with financial difficulties
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How we can help

  • Our trained advisors will work out an affordable monthly payment with you
  • We arrange payment to your creditors
  • We deal with all further correspondence with your creditors
  • In most cases, you're totally debt free in 48 months
  • Call: 0141 274 2044 or fill in our online form

Trust Deed Advantages

A licensed insolvency practitioner, who negotiates with your creditors and ensures that you keep to the terms of the agreement, supervises the Trust Deed process. When the specified payment term is finished, the remaining debts are written off.

Key Benefits

  • Dramatically cut your monthly outgoings with one affordable payment
  • Creditors will be unable to add interest and charges to your debt
  • You won't receive letters or phone calls from your creditors
  • A Trust Deed is more flexible than bankruptcy
  • In most cases you will be able to remain self-employed and serve as a company director
  • Trust Deeds are tailored to suit you. Only pay what you can afford
  • You could be totally debt free in 4 years

Trust Deed Disadvantages

Like all debt solutions, trust deeds come with advantages and disadvantages. In most cases the advantages of a trust deed far outweigh the disadvantages and are an easier way of managing your debt than other debt management solutions.

The Trust Deed will appear on your credit record and may affect your ability to take our future credit products and services. You can't usually apply for different types of debt management such as bankruptcy and debt repayment programs whilst your Trust Deed is running.

Who is Eligible?

If you're a Scottish resident having trouble meeting the demands of your creditors, you may qualify for a Trust Deed. There is no minimum or maximum amount of debt required before a trust deed can be signed.

Granting a trust deed is a voluntary act but once a person has signed a trust deed he and the trustee are legally bound by it.

It is possible to sign a trust deed even if you have no assets! If you are prepared to pay a proportion of your earnings to the trustee; as long as there is some benefit to your creditors.