Trust Deeds Scotland – How Do They Work And Are They Worth It?

  • Lower Monthly Repayments
  • Write Off Unaffordable Unsecured Debts
  • Legislated Debt Scheme

Do you owe £3,000 or more in debt?

Are you in full or part time employment?

Have you been resident in Scotland for the last 6 months?

Can you afford at least £100 per month towards you debts?

If you can answer YES to all these you may qualify for a Scottish Trust Deed…

In This Guide...

What is a Scottish Trust Deed?

A Trust Deed is a legally binding agreement between you and your creditors to repay what you can afford towards your debts. It is a form of legislation to assist those who have serious debt problems and are struggling to meet their unsecured repayments each month.

How can it help me?

A Trust Deed can assist you in lots of different ways. Instead of paying multiple debts to numerous creditors a Trust Deed will consolidate all your debts into one single, lower affordable monthly repayment without the need for taking out a consolidation loan.

Once you have made your set amount of payments for the 48 month period any remaining unaffordable, unsecured debt is written off. This can mean if you owe £55,000 you could potentially have £49,500 completely wiped out.

Your assets, such as your car and your home can become protected which will prevent them from being repossessed by your lenders, unlike sequestration where you would be expected to offer these to cover the debt you have not repaid

Another bonus of a Trust Deed is that once you are in the programme your creditors are not legally allowed to contact you, meaning all those annoying phone calls and threatening letters will stop.

How Does A Trust Deed work?

Trust Deed Scotland will assess your situation and work with you to establish how much you can afford to repay on a monthly basis. Once this has been agreed we then send you out the relevant paperwork for you to review. On receipt of this we will take over all correspondence to your creditors meaning you will no longer have to deal with them anymore.

Debt.org.uk’s experienced Insolvency Practioners will draft together the Trust Deed proposal and submit it to your creditors for review. Upon acceptance we will inform you in writing that your Trust Deed has been passed and you begin making your agreed single monthly repayment.

Do I Have To Deal With My Creditors Again?

No. They are legally NOT ALLOWED to contact you whilst on the Trust Deed programme. Any correspondence regarding your debt will be dealt by our Insolvency Practioner on your behalf.

What If I Don’t Qualify For A Trust Deed?

If you don’t qualify for a Trust Deed then don’t worry, there are other alternatives such as a Debt Arrangement Scheme (DAS). A DAS is a formal debt management plan and is backed by the Scottish Government. The other option would be filing for Sequestration but there may be implications on your credit score in doing this.

What is the process to setup a Trust Deed?

The administration for setting up a Trust Deed is a lot simpler than sequestration. Although it is a legally binding agreement a court appearance is not necessary, all correspondence and dealings will be handled for you by our licensed Insolvency Practioner.

They are referred to as your ‘Trustee’ and will deal with your creditors on your behalf. Your ‘Trustee’ will assess your situation and establish a repayment plan you are comfortable with. They will then draft together the Trust Deed which usually takes approximately 4 weeks and present it to your creditors. Once they have accepted the Trust Deed will be passed and you will begin making your set monthly repayments, all phone calls and letters will stop and in 48 months.

Will be Trust Deed be advertised?

Unlike normal debt repayment plans which are confidential, when you set up a Trust Deed your Insolvency Practitioner is required by law to place an advertisement in The Edinburgh Gazette. This can strike fear through many people who are concerned that friends and neighbours will be able to find out about their finances and the Trust Deed. There is a social stigma attached to it that is very hard to shake.

However, there is really nothing to worry about.

The Edinburgh Gazette is not a regular newspaper like the Times or the Daily Mail. It is a highly specialised bulletin specifically set up to publish information and legal notices. It is published every Tuesday and Thursday and generally circulated to your creditors, people working in the law industry, libraries, researchers and the like, In addition, they have to pay for it – currently a subscription is almost £89, much more expensive than a regular magazine (and a great deal less interesting!) so you won’t find it casually lying around in waiting rooms to be thumbed through.

But what if someone you know did manage to get hold of a copy? Surely it would be a simple matter for them to find your advertisement? Well no, not really!  You see, the Edinburgh Gazette has lots of different categories collectively containing thousands of notices and advertisements, for example Parliament, State, Public Finance, Companies & Financial Regulations, Personal Insolvency, Corporate Insolvency, Partnerships, Post & Telecom, Personal Legal, Societies Regulation, Ecclesiastical, Health, Planning, Environment, Water, Energy, Agriculture & Fisheries etc. In each of these categories are sub-categories of notice type and that’s where they would have to specifically look for notices about Trust Deeds.

You really do have to have a personal vested interest in legal and financial matters to want to bother regularly trawling through the Edinburgh Gazette so it’s highly unlikely one of your family or neighbours would bother to get a subscription on the off-chance information about your finances might appear in it.

So how much information do the advertisements reveal?

If you’re concerned that the advertisement might contain all the details of your financial difficulties, you don’t need to worry. Each notice about Trust Deeds is very straight-forward and contains no information about the amount of debt or the reason behind why you have Trust Deed. It tends to follow a very general form like this:

“Trust Deeds have been granted by [your name], [your address], and previously residing at [your previous address], and previously residing at [your previous address], on [date the Trust Deed was set up], conveying (to the extent specified in section 5(4A) in the Bankruptcy (Scotland) Act 1985) their estates to me, [name of your insolvency practitioner], as Trustee for the benefit of their Creditors generally.

“If a Creditor wishes to object to the Trust Deeds for the purposes of preventing them becoming Protected Trust Deeds (see notes below on the objections required for that purpose) notification of such objection must be delivered in writing to the Trustee within 5 weeks of the date of the publication of this notice in The Edinburgh Gazette.

“Notes: The Trust Deeds may become Protected Trust Deeds unless within the period of 5 weeks of the date of publication of this notice in The Edinburgh Gazette a majority in number or not less than one third in value of the Creditors notify the Trustee in writing that they object to the Trust Deeds and do not wish to accede to them.”

Not the most riveting of advertisements is it! And it is not likely to draw much attention from anyone other than your creditors.

All the advertisements is doing is letting your Creditors know what is happening and that whatever case they have against you for non-payment of your debts they should contact the your Trustee within 5 weeks or risk not being able to pursue you for non-payment while the Trust Deed is in effect.

So, if you feel there is a social stigma associated with the Edinburgh Gazette and your Trust Deed, put it out of your mind. No-one is going to know that you have embarked on a fresh start unless YOU tell them.


How do I apply for a Trust Deed?

Simple fill out our form for a free call back or give us a call on 0800 193 1024 and speak to one of our experienced advisors.

What does it mean when a Trust Deed becomes “protected”?

When a Trust Deed becomes protected it means that no further action can be taken against you by your creditors for recovery of the money you owe them. Your creditors have to accept the Trust Deed account as full and final settlement at the end of the 48 month period.

What if have a change circumstances, i.e. I lose my job?

If you have a change in circumstances and are unable to maintain repayments your Trustee can request a variation from the creditors which will enable you to alter your repayment amount or schedule.

What happens when I apply online?

Once you have filled out our form one of our experienced advisors will give you a call and go through your situation with you. They will help you determine your repayment amount by calculating your disposable income from your income and expenditure details.

If you are happy with this amount we will send the paperwork out for you to sigh or we can arrange a home visit if necessary. Once signed, it will take approximately 6-8 weeks to process. If your Trust Deed is passed it will become protected and you will no longer have to deal with your creditors anymore.

Can my creditors come back to me in the future with recovery action?

No, once the Trust Deed has been passed you creditors are not legally allowed to contact you ever again.

What if one creditor rejects it?

As long as this one creditor does not represent 33% of your overall debt then the trust Deed will not be rejected.

Do creditors have to accept a Trust Deed?

No. Although a Trust Deed will only fail if 33% of your creditors reject the proposal.

Does a Trust Deed cover student loans?


What debts can be included in a Trust Deed?

Only unsecured debts such as loans, credit cards, Overdraft or Hire Purchase can be included. You cannot include government debts such as Council or Poll Tax.

What if I have CCJ’s against me?

This does not matter, you can still take out a Trust Deed.

Will you run a credit check on me before I apply?

No a trust deed is not a loan so there is no need for a credit check.

Are interest and charges frozen?

No exactly frozen but your creditors may agree not to add any additional charges as long as you keep up your set repayments.

What happens if the Trust Deed is not approved?

If your Trust Deed is not approved there are other solutinos available such as a Debt Arrangement Scheme, Debt Management Plan or Minimal Asset Process.

Is a Trust Deed a loan?

No. A Trust Deed is a legally binding agreement between you and your creditors to repay you debts at a reduced rate.

Will I have to deal with my creditors again?

No. Your creditors are not legally allowed to contact you once in a Trust Deed, any correspondence will be debt with our Insolvency Practioner (Your ‘Trustee’) on your behalf.

What will happen to my credit rating?

You credit rating will be affected whilst on the Trust Deed programme and you will not be able to obtain further credit. Once the 48 month period has expired you are free to apply for credit again, although the trust Deed will remain on your credit file for up to 6 years.

Can I still apply for a trust deed if I’m self employed?

This is not a problem as long as you can prove your income. The usual requirement is 6 months worth of trading accounts from your business.

How much does it cost to setup?

Although there are no setup fees there will be a fee for administrating the case over the course of the programme. The debt write off advantages much outweigh the fees though.

Is a Trust Deed a government approved debt solution?

A Trust Deed is a legislated debt solution.

How do I know my debts are being paid?

We will issue you a quarterly statement detailing your repayments.

Will my career by affected?

If you work in specific sectors, i.e. the Financial Services sector or the Police Force your employer has the right to know if you have ever taken out a Trust Deed so it all depends on your employer.

Does it make a difference if I am a homeowner?

No. It makes no difference whether you are a tenant or homeowner or if you are still living with your parents.

Will I have to sell my house?

No, unlike bankruptcy, you will not be required to sell your house although you may be required to release equity in your property but this is dependent on your equity levels.

What happens after I complete my Trust Deed?

Once the 48 month period has expired and as long as you have abided by the agreement you will be legally free from debt. A certificate of completion will be sent out to you which you must keep safe as you may be required to show this if you apply for further credit.

How do I know I’m getting the best advice?

We are licensed and registered with the Financial Conduct Authority. Our license number is; FRN769794, so you can rest assured you are in safe hands.

How much will my repayments be?

That depends on your own personal circumstances as each Trust Deed case is individually tailored to your situation. A brief chat with our Insolvency Practioner should be able to give you a ball park repayment figure.

How long does it take to set up?

Usually 4 weeks to draft by the Insolvency Practioner. They are then submitted to your creditors for approval which usually takes around 2 weeks depending on the creditors. The total average is 2-4 weeks.

How long does a Trust Deed last?

The duration for a Trust Deed is 48 months. Sometimes is can be less if you are awarded an early discharge.

Who can qualify for a Trust Deed?

Anybody who has been resident in Scotland for the last 6 months or more can qualify for a Trust Deed. You must have at least £3,000 of debt to 2 or more creditors, in full or part time employment and be able to afford at least £100 towards your debts each month.

Is a Trust Deed legal?

A Trust Deed is a legislated debt solution put in place to help people who have severe financial difficulties and can no longer afford the monthly repayments on their debts.


What is the process?

You make one reduced monthly payment each month for a period of 48 months and then any remaining unsecured debt left over is legally written off.

What is a Trust Deed?

A Trust Deed is a formal arrangement between you and your creditors to repay what you can afford towards your debts on a monthly basis. It could be classed a form of debt consolidation but with the need for a loan.