Trust Deeds are a debt solution for people living in Scotland who have £5,000 or more in unsecured debts they cannot repay.
Trust Deeds are legally binding arrangements between you and your creditors. They typically take 48 months (four years) to complete and if successful, the rest of your debt will be written off.
As Trust Deeds are legally binding, creditors can’t take further action against you, which also includes being contacted by them. In order for you to fully benefit from a Trust Deed it needs to become a Protected Trust Deed. Your Trustee will do the necessary to achieve this status and this will normally happen automatically.
If you live in England, Wales or Northern Ireland, Trust Deeds are not available to you. Visit our pages on Individual Voluntary Arrangements (IVAs), which are the equivalent debt solution to Trust Deeds.
Disadvantages of a Protected Trust Deed
- Trust Deeds affect your credit rating for six years, starting from the date the arrangement is agreed.
- You will not be able to take out further credit during your Trust Deed.
- Homeowners may be required to release equity for the benefit of your creditors
- If you fail to keep up your payments you may be at risk of Sequestration proceedings against you
- Your details will be held publicly on the Individual Insolvency Register
- A notice (advert) will be placed in the Edinburgh Gazette
- If you’re a homeowner you may have to sell or re-mortgage, although you may be able to agree to make additional payments into your Trusts Deed in lieu of the equity
- You may be expected to sell high value items but certain items will be allowed e.g. a reasonably priced car if required for work and family purposes
Advantages of a Protected Trust Deed
- You will be debt free, typically, in 4 years (48 months)
- Debts included in the Protected Trust Deed will be written off once completed
- You can keep your home and car
- All interest and charges will be frozen
- Creditors will no longer be able to chase you for payment and cannot take further legal action against you
Protected Trust Deed fees
The fees are case dependent and also depend on how much you can pay your creditors each month. Your Insolvency Practitioner will charge a fee to administer and manage your case. This fee will be deducted from your monthly contribution before it is disbursed, meaning no additional payments will be required.
Qualifying for a Protected Trust Deed
- You must live in Scotland
- You have £5,000 or more unsecured debts
- You are able to contribute a reasonable amount towards your debts every month
How do I apply for a Trust Deed?
To enter into a Trust Deed you need to instruct an Insolvency Practitioner (the Trustee) who will administer and manage your case.