Trust Deed Scotland


A Trust Deed is a legally binding debt payment programme available in Scotland. It allows you to repay money you owe through a series of monthly payments, and write off any remaining unsecured debts at the end of the arrangement.

In this guide, we’ll explore exactly what a Trust Deed is, how it works, who qualifies for a Trust Deed, and how it helps people in Scotland deal with serious debt problems.

A Protected Trust Deed is only available to residents in Scotland

A Trust Deed allows you to avoid bankruptcy by making a monthly payment towards your debts over a period of four years, after which your remaining debts will be written off.

How do Trust Deeds work?

Trust Deeds work by transforming all of your unsecured debts into a series of affordable monthly payments, which you then repay over a period of four years.

Trust Deeds are set up by a Trustee – usually a licensed debt professional known as an Insolvency Practitioner (IP). They will help you come up with a debt repayment plan based on what you can afford.

Once you enter a Trust Deed, you enter a legally binding contract with your creditors. A Trust Deed freezes interest and charges on your debts, and as long as you maintain your monthly payments, any debt left over at the end of the Trust Deed will then be written off.

Who qualifies to enter into a Trust Deed?

Trust Deeds might be the best option for people with unsecured debt who meet the following criteria:

  • They live in Scotland
  • They owe at least £6,000 in unsecured debt
  • They owe money to at least two creditors
  • They have enough money to pay a regular monthly payment

In England, Wales, and Northern Ireland, the equivalent of a Trust Deed is an Individual Voluntary Arrangement, or IVA.

How do I set up a Trust Deed?

You can’t set up a Trust Deed on your own, but the process is relatively simple.

Contact an Insolvency Practitioner (IP)

Insolvency Practitioners are debt professionals who help set up and administer debt solutions. Your Insolvency Practitioner will act as the Trustee of your Trust Deed, helping draft your repayment proposal and handling monthly payments on your behalf.

Your IP will charge fees for their services, but they will be taken from your regular monthly payment over the course of the Trust Deed, so you won’t have to pay anything upfront.

Submit a repayment proposal to creditors

Once you find an Insolvency Practitioner, they will explore your debts – in addition to your income and expenditure – and help you draft a repayment proposal.

That proposal will then be shared with your creditors, who will be given the chance to vote on whether they accept the terms of the Trust Deed. As long as a majority of your creditors vote in your favour, the Trust Deed will be approved.

Comply with the terms of the Trust Deed

If your proposal is approved by the majority of your creditors, you can officially start making monthly payments towards the arrangement.

Your payments will be taken at the same time each month and your Insolvency Practitioner will make sure they are divided fairly amongst your creditors. As long as you keep up with payments for the length of the arrangement, your remaining debt will be written off once the Trust Deed is complete.

A Trust Deed freezes interest and charges on your debts, and as long as you maintain your monthly payments

What debts can be included in a Trust Deed?

  • credit card debt
  • store cards
  • payday loans
  • personal loans

What's the difference between a Trust Deed and a Protected Trust Deed?

If you’ve done some research on Trust Deeds in Scotland, you may have heard the term ‘Protected Trust Deed’, which we’ll explain below.

What are Protected Trust Deeds?

The point of a Trust Deed is to give an individual the time and space they need to deal with their unsecured debts.

That cant’ happen if that individual is still being hassled by creditors for payment. That’s why Trust Deeds become ‘Protected’, which is the name given to the moment a Trust Deed becomes legally binding.

Once a Trust Deed becomes a Protected Trust Deed, any interest and charges on your debts will be frozen – making them easier to repay – and your creditors will no longer be able to pester you for payments or take legal action against you over unpaid debts.

When does my Trust Deed become ‘Protected’?

When setting up your agreement, your IP will have sent your proposal to your creditors. Your creditors then have a period of 5 weeks within which they can raise objections to the arrangement.

Your Trust Deed will only become protected if:

  • That 5-week period passes with no objections raised
  • Objections raised by creditors are settled
  • Fewer than 50% of the creditors (or creditors representing 33% of the total debt value) object

Let’s say you owe £10,000 in debt to five creditors. As long as at least three of those creditors, or the creditors that account for at least £6,700 of your total debt, approve your arrangement, it will qualify for protection.

How long do Trust Deeds usually last?

As long as you stick to the terms of your Trust Deed and make each monthly payment on time, your Trust Deed should be completed after four years, taking in a total of 48 monthly payments.

It is possible for a Trust Deed to last longer than four years, however this is uncommon and usually involves a material change in circumstances for the person involved.

Why choose YourDebtExpert?

What impact will a Trust Deed have on my life?

While a Trust Deed allows you to avoid bankruptcy and able keep assets like your home and your car, you will be placed under financial constraints for the length of the arrangement.

While you are in a Trust Deed, you won’t be able to borrow money without the permission of your Insolvency Practitioner, and you will be expected to live on a relatively tight budget in order to pay the majority of your money towards your debts.

Even once your Trust Deed is complete, you might find it more difficult to do things like open a bank account or be accepted for lines of credit, but your situation will improve once the arrangement is complete and your unsecured debts have been cleared.

Will entering a Trust Deed hurt my credit rating?

It’s likely that your credit score will already have been affected if you’re struggling with debt, but entering into a debt solution can also have an impact, so your Trust Deed may hurt your credit rating temporarily

If you get enter a Trust Deed or the Debt Arrangement Scheme, it will be recorded on a public register which can be found on the Accountant in Bankruptcy website. Credit reference agencies will include that information to your credit report, which will ultimately lower your credit score.

Your Trust Deed will remain on your credit file for six years from the date the arrangement starts, but once that time has passed, it will be removed from your file and you can begin the process of rebuilding your credit profile.

Advantages & disadvantages of a Trust Deed


Avoid bankruptcy

Turn debts into single monthly payment

Freeze interest and charges

Stop hassle from creditors

Write off up to 81% of total debt


Restricts your monthly budget

Doesn't cover secured debts

Is subject to creditor approval

Recorded on a public register

Will impact your credit rating

Where can I get debt advice to help improve my financial situation?

If you owe money to multiple creditors, it’s hard to live with the uncertainty, especially if your creditors are putting pressure on you or even threatening legal action.

We can help. At Your Debt Expert, you have a team of debt specialists ready to listen to your situation, and find your the best debt repayment plan for your circumstances.

To find out more about Trust Deeds and other debt solutions, contact us for free debt advice today on 0800 082 8086.

Where can I get more advice on Trust Deed Scotland and other debt solutions?

To discuss your options and get the support you need to deal with your debt today, contact us now on 0800 082 8086 or click the button below to get started.