Trust Deed

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A trust deed in Scotland is an agreement designed for people who struggle with their monthly repayments. A trust deed helps to pay off your debt with the finances you have available each month. Once you enter a trust deed your creditors can’t apply further charges or interest. Don’t Fret About Debt works as a trustee to manage your trust deed.

The trustee acts on behalf of both you and your creditors in order to achieve the best possible financial compromise. This means you no longer have to make repayments to your creditors or deal directly with them.

You are protected from any recovery action during the term of the trust deed as long as you maintain your monthly contributions. At the end of the term, the remainder of your debts will be written off – your creditors can’t ask for any further funds.


The trust deed lasts for a fixed period of time, usually 4 years.

You no longer have to deal with your creditors yourself, the Insolvency Practitioner takes care of this.

The monthly payments will be affordable, based on your income and expenditure.

It is a better alternative to bankruptcy for both you and your creditors.

Your home and other assets can be protected.


In some cases, assets will have to be sold for the benefit of the creditors.

There are some circumstances where trust deeds don’t become protected. For example, you need agreement from at least half your creditors. A failed trust deed may result in sequestration.

Your credit rating will be affected for around 6 years.

A protected trust deed in Scotland may prevent you from doing some jobs.

Certain debts cannot be discharged by a protected trust deed. For example, student loans, fines/penalties/compensation/forfeiture orders or any liability due to fraud.


A Trust Deed is a Scottish debt solution and formal legally binding document that transfers part or all of your assets and your liabilities (debts) to a Trustee to manage for the benefit of your creditors. Usually you will be required to pay over your surplus income after all your monthly commitments have been accounted for, on a monthly basis. A Trust Deed normally lasts 4 years. Your Trustee needs to be a licensed insolvency practitioner.

To become protected, a Trust Deed must meet certain criteria:

  • The Trustee must be a licensed Insolvency Practitioner
  • The details of the Trust Deed must be published in the Register of Insolvencies and the Trustee must write to all known creditors advising them

A Trust Deed automatically becomes protected if it meets these conditions. This is unless a majority in numbers or at least one-third in value of the creditors object in writing within five weeks of the publication in the Register of Insolvencies. A Trust Deed is binding on all creditors once it becomes protected. It then stops creditors from seeking to enforce their debt by diligence or sequestration.

All our debt advisors can give you free expert advice on Trust Deeds and the other options which are suitable to your personal circumstances. With the options available, advice from a qualified debt expert is essential to help you make an informed choice.

You can do this by simply filling in our online debt calculator with your contact details. One of our team will then be in touch to discuss your circumstances. If a Trust Deed is the right option for you, we can complete the application process in one call.

You can also contact us by using the ‘contact us’ form or by sending an email to Alternatively, speak to us using online chat or by phone on 0141 567 4567.

When you sign a Trust Deed, your monthly debt repayments will stop. Your income and expenditure will be assessed and you will pay your surplus income to your Trustee each month by way of a contribution. This will normally last for 48 months.

If you have any assets then these must be valued and any equity in your property will usually have to be realised for the benefit of your creditors. However, if you have a considerable level of equity in your property then there are debt solutions which exclude your home. Your debt advisor will make you aware of these.

After you have made your agreed level of contribution and any assets have been realised, your Trustee will pay a dividend to your creditors from the money you have paid. This usually has to be at least 10p in the £ and will be agreed at the outset.

Once your Trustee has paid the dividend to your creditors and all administration has been dealt with, they will apply for the discharge and close the case. Any debts incurred prior to the date you signed the Trust Deed will be written off and creditors will not be able to pursue you for these.

To be eligible for a Trust Deed, you must:

  • Owe at least £5,000 in unsecured debts.
  • Be a Scottish resident and have lived in Scotland for at least six months.
  • Be able to make a monthly contribution to your Trust Deed from your income.
  • Struggle to keep up with your current repayments.

Usually you will make a contribution to your Trust Deed each month for 48 months. Once you have met all of your obligations to the Trust Deed you will receive your discharge. However your Trustee will stay in office to tie up any outstanding administration and pay the dividend to your creditors. If you miss any payments during the course of the Trust Deed then you will not receive your discharge until these have been paid.

Your Trust Deed will be published in the Register of Insolvencies. However, your friends and neighbours won’t accidentally stumble across it. The only way someone will find out about it is if you tell them or they search for your name in the Register. Most people aren’t even aware it exists.


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