What is a Trust Deed?
A Trust Deed is a legally binding debt solution available in Scotland for people with qualifying unsecured debt who cannot repay everything they owe in a reasonable time. It is set up and managed by a licensed insolvency practitioner (often called your trustee).
In many cases, you make one affordable monthly payment for a typical period of around 4 years (sometimes longer depending on circumstances), and if you meet the terms, remaining included unsecured debt may be written off at the end.
What does “Protected” mean?
A Trust Deed usually becomes more effective once it gains protected status. A Protected Trust Deed can stop most creditors included in the arrangement from taking separate enforcement action, as long as the deed is properly set up and you keep to the terms.
Who can a Trust Deed help?
- People living in Scotland with unsecured debts they cannot realistically clear.
- People who can afford a regular contribution after essential living costs.
- People looking for a structured alternative to long-term minimum payments.
- People who want legal protection from included creditors, where eligible.
What debts can usually be included?
- Credit cards
- Personal loans
- Overdrafts
- Store cards
- Catalogues
- Some utility arrears
Debts that may not be included or treated differently
- Student loans
- Court fines
- Some fraud-related debts
- Ongoing child maintenance or similar obligations
- Some secured borrowing (e.g. mortgages, hire purchase) usually remains outside
Main advantages and disadvantages
Potential advantages
- One affordable monthly payment
- May stop creditor pressure and included enforcement once protected
- Can freeze the situation and provide structure
- Remaining qualifying unsecured debt may be written off at completion
Potential disadvantages
- It affects your credit file
- Your assets may be reviewed, including home equity
- You must follow the agreement terms
- Missed payments can put the arrangement at risk
- Some jobs or professional memberships may be affected
How long does it last?
Many Trust Deeds run for around 48 months, but the exact term depends on your proposal, affordability, and whether any variations are needed during the arrangement.
What should you do next?
- List all debts, income, and essential spending.
- Check whether you may be eligible.
- Compare all debt solutions, not just Trust Deeds.
- Take regulated advice before signing anything.