Key points
- Only available if you live in Scotland
- Usually lasts four years
- Run by a licensed insolvency practitioner (the trustee)
- Fees are taken from your payments
- Remaining qualifying debt is written off at the end
How does a trust deed work?
You sign your assets and spare income over to a trustee, who is a licensed insolvency practitioner. The trustee makes payments to your creditors from what you pay each month. If enough creditors don't object, the trust deed becomes protected, which stops creditors taking further action.
Who might it suit?
Trust deeds are usually considered by people in Scotland with several unsecured debts and a regular income who can make a reasonable monthly payment.
What about my home?
If you own property, the trustee may ask you to release equity, for example by remortgaging. In some cases property can be included, so get advice before you sign.
Downsides
- It's a long commitment, and missing payments can lead to sequestration.
- It appears on your credit file and the Register of Insolvencies.
- Fees reduce how much your creditors receive.
Frequently asked questions
How long does a Protected Trust Deed last?
Usually four years, though it can be longer in some cases.
Is there a minimum debt for a trust deed?
Trust deeds are usually only suitable for people with fairly large unsecured debts. An adviser will check this with you.
What's the difference between a trust deed and an IVA?
They're similar, but a trust deed is the Scottish version and an IVA is used in England, Wales and Northern Ireland.
Free debt advice is available
You can get free, impartial debt advice from not-for-profit organisations through MoneyHelper's debt advice locator.
Sources and further reading
This guide is general information, not advice, and was correct when last updated. Rules and limits can change. Speak to a regulated adviser about your own situation.