What’s a trust deed?

A trust deed is a voluntary and legally-binding agreement between you and your creditors that can help you get out of debt.

You can use a trust deed to pay off part of any unsecured debt such as credit cards, payday loans, store cards and money owed to HMRC.

A trust deed can only be arranged and administered by a licensed insolvency practitioner such as Trust Deed Scotland.

Who can enter a trust deed?

A trust deed is available to people who’ve been living in Scotland for more than six months and who have debt of £5,000 or more. There are many factors that can influence your eligibility for a trust deed, including:

  • Your occupation
  • Whether you have regular income
  • Your debt level
  • Who you owe

You can qualify as a homeowner, a private tenant, a council tenant, or someone who lives with their parents. If you own your home, your Trust Deed Scotland advisor will explain to you how you can protect it so you’re not forced to sell it to pay your debts.

Find out if you’re eligible for a trust deed with our Trust Deed Debt Calculator.

Are there other ways to manage debt?

If you live in Scotland, other options for paying debt include sequestration (the Scottish version of bankruptcy), but this is usually advised against if you have assets such as a house.

Another option is a debt arrangement scheme, a government-endorsed initiative that lets you pay off your debt over an extended period of time. Your debts get frozen and you make payments at a rate you can afford – however, this involves paying back the full debt amount owed.

A third option is a trust deed, where affordable monthly payments are agreed typically over four years, after which any remaining debt is generally written off.

If you live in England, Wales or Northern Ireland, you can use an individual voluntary arrangement, which is similar to a trust deed agreement.

Learn more about the different options available for paying debt on our debt solutions page.

You can also contact us by calling 0141 221 0999 or emailing enquiries@trustdeedscotland.net, or visit our office at 2 West Regent St, Glasgow G2 1RW. One of our advisors will walk you through the options and advise on what will be best for you.

How do you set up a trust deed?

Arrange a free meeting with one of our advisors, who will learn more about your situation and guide you through the different financial options available.

Your advisor will then give you a checklist of any additional information required. Once we’ve received it, we can start drafting a proposal for your trust deed. Your advisor will arrange a meeting with you to finalise the paperwork, return any original documents you gave to us and answer any final questions.

They will also help you setup your first trust deed payment, after which you can stop all separate debt payments to your creditors. These new monthly payments will be based on what you can afford, and will be taken out every month at a convenient time for you. You can make the first payment as soon as you’re ready.

In the meantime, creditors have five weeks to make a claim on your trust deed application. If they don’t, your trust deed will become protected. If they do, your trustee will let you know and advise you on your options.

Learn more about how trust deeds work.

What’s meant by a protected trust deed?

After you’ve agreed and signed your trust deed, the next step is to get it approved by your creditors to protect it. Trust Deed Scotland currently has a 98% creditor acceptance rate.

Getting your trust deed approved gives you legal protection from your creditors – as long as you stick to the terms of the trust deed, creditors can’t take further action to pursue the debt.

A protected trust deed also protects you from bankruptcy, although your trustee or creditors can still petition for it if you break the terms of the trust deed.

If creditors don’t agree to your trust deed, it’s not ‘protected’ and therefore not legally binding.

How do you get a trust deed protected?

To ensure your expectations are managed from the start, your Trust Deed Scotland advisor will initially let you know what your chances are for approval based on your circumstances. Two-thirds of your creditors must agree to your trust deed proposal for it to be approved and protected.

We’ll process your paperwork and register your case on AIB (Accountant in Bankruptcy), where your creditors can access it. They usually have five weeks to accept or reject it – the decision will be relayed to you by the insolvency practitioner (your ‘trustee’), as creditors can’t directly contact anyone who has entered a trust deed.

This five-week period is known as the ‘protection period’. After it lapses, with no claim from your creditors, you’ll receive your protection letter from your trustee, making you aware that your trust deed has been approved and that you’re now in a protected trust deed agreement.

What are the advantages of a protected trust deed?

  • It puts you in control of your money –​ you agree to pay only what you can afford based on your disposable income, and all payments to creditors are combined into one manageable monthly payment.
  • Your creditors can’t contact or pursue you while you’re in a trust deed agreement – your trustee will handle all communications with them and relay any information to you.
  • Your debt will be frozen during your protected trust deed term, which means no interest or lenders’ fees will be added to what you owe.
  • At the end of the trust agreement (usually four years), the rest of your debt will be written off. However, if you’ve agreed to pay off the debt using some of your equity, you may have to take on additional payments to protect your equity, which could exceed four years – your advisor will go over this with you before you enter your trust deed.

​What are the disadvantages of a protected trust deed?

  • Entering a trust deed could harm your credit rating, which is an estimate of your ability to keep financial commitments. A trust deed will stay on your credit record for six years.
  • A reduction in your credit rating will make getting new credit harder and more expensive during and after the trust deed term.
  • A trust deed may not be an option with certain job types. To find out more about this, contact Trust Deed Scotland by calling ​0141 221 0999 or emailing enquiries@trustdeedscotland.ne​t, or check your employment contract for any information regarding this.


Who is Trust Deed Scotland?

We’re a non-profit company giving free debt advice on trust deeds and other financial arrangements to Scottish residents, and are responsible for handling trust deed arrangements.

We’ve helped over 15,000 people in Scotland get their finances in shape, and have a ​9.9/10 rating on Trustpilot​.

We explain financial matters in plain English and will never sell your details for marketing purposes. Our service is confidential and there’s no obligation to agree to anything after talking to us.

What are the rules of a trust deed?

The most important rule is that you stick to the monthly debt-payment schedule agreed with your creditors – if you do this, your creditors can’t take further action against you.

During your trust deed term, you can’t take out any new credit, such as a loan or credit card.

If you’re a homeowner and the home is worth more than the mortgage, you may need to withdraw some of its equity and use it to pay some of your debts, but this will be agreed before entering a trust deed on your terms.

What’s the minimum debt level required to take out a trust deed?

£5,000. You also need to have a regular income or for someone to guarantee to pay some or all your debt.

What’s the difference between a trust deed and sequestration (Scotland’s version of bankruptcy)?

Trust deeds and sequestration are different ways of dealing with debt that you can’t pay over a set period.

They both agree a schedule to pay debt to your creditors, with sequestration generally taking one year as opposed to four when it comes to trust deeds. However, unlike sequestration, trust deeds don’t carry the chance of you losing your home or other assets.

What’s the difference between a secured and an unsecured debt?

A ​secured ​debt is usually for a large loan of more than £10,000, such as a bank loan or a mortgage. The company lending you the money will use your asset, often your home, as security if you can’t repay your loan. That means your lender has the right to repossess your home and sell it to pay your debt.

An ​unsecured loan​ is when you borrow money from a bank or another lender and agree to make regular payments until it’s paid. Because the loan isn’t secured on your home, the interest rates tend to be higher.

What unsecured loans aren’t covered by a trust deed?

Student loans can’t be included in a trust deed but all other unsecured debts can be considered.

Are there any fees when setting up a trust deed?

All fees are included in your monthly payments:

  1. 1) A fixed administration fee
  2. 2) A fee based on how much debt you pay during your trust deed term

These are charged against the money you owe creditors, so will be agreed between you and your creditors at the start.

How are trust deed monthly payments calculated?

It’s based on your disposable income, which is calculated by deducting your living costs (mortgage/rent, bills, child car, transport costs, food, etc.) from your income.

Most people find after entering a trust deed that their monthly debt payment is hundreds of pounds less than when they were making separate payments to their creditors.

Can I enter a trust deed if I’m unemployed?

No. However, you can still enter a trust deed if you’re self-employed and can prove your income, or are employed part-time.

How long does a trust deed last?

Typically four years – you make 48 monthly payments (the same amount each month) to your trustee who distributes the money to your creditors, minus their fee for arranging and managing the trust deed.

However, in circumstances where you’ve agreed with your trustee to pay some equity from your home, it can take more than four years.

What happens after a trust deed term is complete?

The rest of your debt will usually be written off, leaving you debt free, unless you’ve agreed otherwise with your trustee beforehand.

Will I be able to take out a mortgage after completing a trust deed term?

Much will depend on your income and whether you can convince a mortgage lender that you’re a responsible borrower. We recommend that you talk to a financial advisor for more information about this.

Can a trust deed affect my credit rating?

Your credit rating will probably be affected, but remember it will already have been damaged if you’ve missed any payments to your creditors. Once your trust deed agreement has ended, you can start rebuilding your credit rating.

The trust deed will be on your credit record for six years after you start it. The average trust deed lasts four years, so it’ll still be on your credit record two years after you’ve finished it.

Will I lose any of my assets if I enter a trust deed?

Your assets should be safe if you stick to the trust deed’s terms. However, if you’re a homeowner and your home is worth more than the amount owed on your mortgage loan, you may have to release some of its value.

The gap between the value of your home and mortgage is called equity. Your advisor will discuss this with you, and if necessary, any equity arrangements will be organised before entering a trust deed.

What do other people say about Trust Deed Scotland?

Read reviews from our customers on ​Trustpilot​ and on our Testimonials page.

Apply for a trust deed today

Or for more information, call ​0141 221 0999, email enquiries@trustdeedscotland.net, or visit our office at 2 West Regent St, Glasgow G2 1RW.

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