A Scottish Trust Deed is a voluntary agreement, available to residents of Scotland, which allows you to repay only what you can realistically afford (this is the amount you have left over after your living costs have been accounted for) for a period of 48 months. After that time any outstanding unsecured debts are written off.

A qualified Insolvency Practitioner is appointed as Trustee and the rights to any assets you own will be transferred to them. They will look to sell these assets if they believe there is any beneficial interest (surplus value after secured debts are taken into account) to pass on to your unsecured creditors.

If your creditors don't agree to the Trust Deed becoming protected, you are still able to proceed. The main differences are that your creditors will still be able to petition for your Sequestration if they wish and any creditors that objected to the Trust Deed becoming protected are still able to chase you for the money you owe them. However, in reality, if your Trust Deed is not given protected status, Sequestration, an informal Debt Management Plan or a Debt Arrangement Scheme Payment Plan are likely to be more appropriate solutions for you.

Advantages and Disadvantages of a Scottish Trust Deed

  • You only make a single payment each month to the Trustee, who will then administer and distribute your payments
  • All contact from your creditors will stop once the Trust Deed is accepted
  • We will help you prepare your application, including agreeing the level of your household and personal spending based on guidelines acceptable to creditors
  • If the Trust Deed is protected then no legal action can be taken by any of your creditors whilst the arrangement is in place
  • You could be cleared from your existing debt within 4 years
  • If the Trust Deed is protected then interest and charges will be frozen
  • A viable alternative to bankruptcy
  • On completion of the Trust Deed, the balance of what you owe your creditors is written off
  • You may be able to continue running any business you have

What are the Disadvantages of a Trust Deed?

  • If you do not adhere to the terms of your Trust Deed you may face Bankruptcy
  • Your credit file will be adversely affected for 6 years from the date that your Trust Deed is accepted
  • You will be unable to obtain further credit while the agreement is in place
  • You will be required to remortgage to release equity in your property
  • If you are unable to obtain a remortgage then your Trust Deed may be extended and you will have to carry on making payments for up to 12 months
  • Any large or valuable assets may have to be sold to release their value


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