Trust Deed Scotland

What is a Trust Deed?

A Scottish Trust Deed is a voluntary arrangement you can make with the people that you owe money to. You will agree to pay low monthly payments towards a plan for a period of 4 years. When the 4 years has ended, your remaining debt will be completely written off and you will become totally debt free.

A trust deed is legally binding and has to be set up by a qualified Insolvency Practitioner. Once you are in your Scottish Trust Deed:

  • All of your debt will be written off after 48 months
  • The interest and charges on your debts will stop
  • Your creditors will not be able to contact you at all
  • Debt collectors and bailiffs will not be allowed to visit your home

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What debts can go into a Protected Trust Deed?

  • Credit cards
  • Unsecured loans
  • Payday loans
  • Catalogues
  • Store cards
  • Council tax debts
  • Benefit overpayments
  • Overdrafts
  • Credit union debt
  • HMRC debt
  • Previous mortgage debt
  • Old car finance debts
  • Other unsecured debts
  • Debts to friends and family

It is mainly unsecured debts which can be placed into a Trust Deed.

What debts can’t go into a Protected Trust Deed?

  • Mortgage payments
  • Rent arrears
  • Log book loans
  • Hire purchase arrears
  • Guarantor loans
  • Personal guarantees

Secured debts can not go into trust deeds.

Do I qualify for a Scottish Trust Deed?

To qualify for a trust deed you will need to meet a certain criteria. It is at the Insolvency Practitioners discretion whether they loosen up the criteria, depending on individual circumstances. The criteria is:

  1. A minimum debt level of £5000
  2. You must owe money to two or more people (or have 2 lines of credit with one lender)
  3. You must be a Scottish resident
  4. You must be willing to put at least £80 per month into your arrangement

This criteria is only rough and you may be accepted outside of it, please use the Trust Deed Calculator to check if you are eligible.

Am I Eligible?

What does a Trust Deed Scotland cost?

There are no upfront fees for applying for a trust deed so you can apply now without paying a penny. Any costs relating to your arrangement will be deducted from your monthly contributions, which start at £80 per month.

Will a Scottish Trust Deed affect my credit rating?

A trust deed will have a negative affect on your credit rating. When you are in your trust deed you will not be able to take out any more credit until your trust deed has completely finished, which would be 60 months from your start date. When the trust deed has finished, you can then begin to rebuild your credit rating. You would have a completely fresh start with no debt whatsoever.

What is a Scottish IVA?

An Individual Voluntary Arrangement is available in England, Wales and Northern Ireland. Although there is no such thing as a Scottish IVA, there is a plan in place which is very similar. In Scotland, this is called a Protected Trust Deed. It operates and is managed in a very similar way to an IVA, they are both legislated debt solutions which are Government backed. Although there are some important differences between a IVA Scotland and an Individual Voluntary Arrangement. Your advisor will discuss the full details of your trust deed with you on your initial consultation.

Trust Deed Scotland Pros and Cons


No interest and charges

Once you have entered your trust deed and you are keeping up with your monthly repayments, all interest and charges will stop on your unsecured debts. When unsecured debts are normally running, they often come with high interest rates and charges if you exceed credit limits or for late payments, all of this will stop.

Generous allowances

When you are in debt you often have to make sacrifices and sometimes that involves cutting out things which you may think are not strictly necessary at the time. With a Scottish Trust Deed, your Insolvency Practitioner will run through a budget with you. The budget will prioritise some spending, so you won’t have to go without. Here are some examples of items which would appear in the budget:

  • Rent or mortgage payments
  • Utility bills
  • Sky
  • Food
  • Mobile phones
  • Childcare
  • Children’s pocket money
  • Entertainment
  • Clothes
  • Fuel costs
  • Other living costs

No more phone calls, texts or letters

When your trust deed is approved by your creditors, they will not be allowed to contact you by any means.

This means that all letters, phone calls and visits would stop. All credit contact would go directly to your insolvency practitioner.

Finish line

When you arrangement is in place, you will get a date when you will be completely free from unsecured debt. This will give you a great sense of relief as you will get a clean slate and a fresh start!


Your credit rating will be affected

If you have a good credit rating at the moment, prepare for this to be damaged. You will not be able to take out credit whilst in the 48 month term of your trust deed, although when it’s finished feel free to rebuild your credit rating.

Doesn’t cover secured debts

A trust deed only covers your unsecured debts. This means you wouldn’t be able to put secured debts such as hire purchases and mortgage arrears into it.

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