Protected trust deed. Is it right for you?

Trust deed is an arrangement that is legally binding in Scotland where you are making reduced payments over 4 years. At the end of this time, your unsecured debts are will get written off.

A trust deed is a form of insolvency so that your unsecured debts need to greater the value of your assets such houses or vehicles. Unsecured debts include a credit card debt, personal loans and store cards.

If you live in Scotland trust deeds will be available. If you live in England, Wales or Northern Ireland, an Individual voluntary arrangement (IVA) is a similar solution to trust deeds, but it is important to note that it has different fees, benefits and risks associated with it.


Trust deeds at a glance: 

Pros Cons
You can make an affordable repayment to your creditors over 4 years with a help of an Insolvency Practitioner (IP). After that, any remaining debt will be written off. A IP take a charge for their service out of your monthly repayment so it is important to shop around and find which is the best one for you.
Your creditors will not chase you for payment or add more interest and charges to your debts once your trust deed has been approved and they cannot take legal action. A trust deed will affect the terms of your employment and you should check your contract or speak to your HR department about this.
You will be able to keep one vehicle that is essential and that costs £3,000 or less while you have to sell some assets. If the trust deed fails there is a risky chance of bankruptcy.
You don't have to go to court even though a protected trust deed is a formal debt solution Your credit rating gets affected for six years, start from the date and then arrangement is agreed.

Things you must take into consideration: 


There are a number of things to take into consideration before deciding to enter into the trust deed. These are the following points:

  •  A trust deed is an agreement that is legally binding between your creditors and yourself.
  •  Provide that you comply with the terms and conditions of your protected trust deed, your creditors are not allowed take further action to recover the money you owe them or to make you go into bankruptcy.
  •  You will have to check if it has affected your job. A trust deed is a form of insolvency and having one could lead to disciplinary action or dismissal in certain jobs, such as those working in financial services     or in a legal profession.
  •  If you are granted a trust deed and you have rented out your property to your landlord, they will terminate your tenancy agreement.
  •  If you are a homeowner you might have to release equity from your property
  •  You will have to pay any surplus income that you have after your essential living costs are getting paid into your trust deed for the past four years.
  •  You will have to inform a trustee regarding your personal or financial situation changes. i.e. if you inherit some money or that you have lost your job
  •  Only the debts included in your trust deed will get written off at the end of it. there's a risky chance of bankruptcy if the trust deeds fail.
  •  You will have to pay a fee for the services of the insolvency practitioner running to the trust deed. This fee is deducted from your payments.

How can trust deed affect me? 


Before getting into trust deed you should decide very carefully due to the possible consequences for your personal, professional and financial life. These include the following:

  •  You will have to keep to a budget for the full term of your trust deed for 4 years.
  •  A trust deed can also affect any hire purchase agreements you might have in an addition to your employment.
  •  Your details will be added on a public register called the Register of Insolvencies (ROI) for a period of five years. The register that contains all details of current protected trust deeds and is maintained by   the Accountant in Bankruptcy (AiB) however the general public are allowed to view,
  •  During your trust deed, there will be restrictions on your spending. You will have to follow very carefully to a budget to make sure that you can afford the monthly payments.
  •  There will be charge for the services of an insolvency practitioner but the fees will get deducted from the trust deed fund. This is the total amount of money you will be able to offer your creditors and is   made up of your monthly payment on the agreed term and any assets or equity are included.

Without an IP (they're known as your 'trustee') you cannot start off a trust deed. The IP offers a proposal and will also be able to help and support you throughout the arrangement.

While a trust deed is the correct solution to your financial situation, there are other options that you might want to consider and take a look at:

A debt payment programme (DPP) under the Debt Arrangement Scheme (DAS). 

A debt management plan (DMP). 


Minimal Asset Process bankruptcy (MAP) 

Trust deeds are a specialised area of Scottish debt advice. If you have not already received advice from us, make sure it is the best solution for yourself. We will provide you the best solution to help you deal with your debts also with a tailored budget.

If you prefer to talk to us, please call our Helpline on 0845 527 2790 and you can speak to one of our expert Scottish debt advisors.

If a trust deed is the best solution for you, we will help you find an IP and give you details of the best firms available.

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