Entering a Trust Deed needs careful consideration. It can be a fantastic way to ease the burden of unaffordable debt but it will have implications for you and it’s important to understand what those are. To help you in that respect, we have answered the questions most commonly asked by people.

How long will a trust deed last for?
This can vary, but it usually lasts for 4 years. It may be extended if you are a homeowner or if during the agreement for example, you fell pregnant and were unable to keep up repayment whilst on maternity leave – your trustee could extend the length of your agreement to reflect any period of reduced payment.
How much will I have to pay each month?
You’ll only pay what you can afford. Your new monthly payments will be calculated according to what money is left after you’ve taken care of your bills and other essential living costs. This should ensure that you don’t fall behind on anything important. What’s more, your payments could change with your circumstances. If your available income increases, you’ll be able to pay more each month; similarly, if your available income falls, you may be able to reduce your payments accordingly (up to a point).
How do I apply for a Trust Deed?
Simply fill in our call-back form above and one of our expert debt advisers will be in touch shortly. Or if you don’t want to wait, call FREE on:01412971178 We will check you qualify, and if it is the best option for you, we will calculate what you can afford to repay before presenting your case to a licensed Insolvency Practitioner who will then deal with your lenders on your behalf. Only a licensed Insolvency Practitioner can set up and administer a Trust Deed.
How long does it take to set up?
Signing can take a few days, however It takes typically 5-6 weeks to get protected.
Will interest and charges be frozen while being set up?
No but any such interest and charges will be included in the Trust Deed if it is approved and becomes protected.
Is it like an IVA?
Yes, they are similar. The Trust Deed is the Scottish equivalent of an IVA in Scotland, and is only for residents of Scotland and usually lasts for four years. An IVA is for residents of England, Wales and Northern Ireland. A typical IVA would last for five years and have similar workings.
How is my proposed repayment amount calculated?
The amount that you repay is based on what is left over from your income after all other secured debts, like your mortgage and car payments, and living expenses are deducted. Whatever is left over can be proposed as a repayment to your lenders.
Is there a minimum monthly repayment that is acceptable?
The minimum monthly repayment contribution is generally £150.
What if my circumstances change?
If you are unable to maintain repayments because of changed circumstances, your trustee can request a variation to reflect your new circumstances.
What happens if I just stop paying my agreed contribution?
If you fail to keep to the arrangement, your trustee has the right to freeze your bank account and even to apply for you to be sequestrated.
Do I have to be a homeowner?
No. It makes no difference whether you are a private tenant, homeowner, council tenant or if you are still living with your parents.
If I am a homeowner, will I have to release equity in it?
Depending on the equity you have you may have to release equity in your home into the Trust Deed usually as part of the final settlement. However, there are mechanisms that can be put in place to protect your home such as “buy-back” or extra contributions. There are alternative solutions such as Debt Arrangement Schemes which may be more suitable should you have too much equity to make a Trust Deed viable.
Will I be able to keep my home?
Whilst your home is at risk of being sold unless excluded under the Home Owner and Debtor Protection (Scotland) Act 2010, in most cases you should be able to keep it. If you have equity in it, you may have to re-mortgage to release the equity to help repay the debt, usually as part of the final settlement. However, even if you can’t, or don’t want to, re-mortgage there are mechanisms that can be put in place such as “buy-back” or extra contributions that ensure you keep your home. There are alternative solutions such as Debt Arrangement Schemes which may be more suitable should you have too much equity to make a Trust Deed viable
Will I ever get credit or a Mortgage again?
When you enter into a Trust Deed you will not be allowed any form of additional credit. After your arrangement has been complete and you have been formerly discharged, you will find it more difficult to get obtain credit for at least three years after it’s completion. You will need to rebuild your credit file and it is then up to you to rebuild your credit rating.
Is a Trust Deed a loan?
No. It is a voluntary action which allows you to come to an agreement with your creditors to repay them less than you actually owe them. No credit checks are required and your offer of repayment is based on what you can actually afford to repay.
Will I be credit checked before acceptance?
No. Since you will not be borrowing any money, there will be no need for a credit search.
Can I enter a Trust Deed if I already have Court Action against me?
Yes. Entering into a Trust Deed is not prohibited if you have court action against you.
Do I have to tell my partner?
It is a private arrangement between you and your creditors. It is advisable, where possible to share this with your partner for your own peace of mind. You may need to check that you have no joint debts or that someone has acted as a guarantor on your behalf.
Does it cover all of my debts?
No. They can only cover your unsecured debts and arrears. This is usually things like credit cards, bank overdrafts, store cards and personal loans.
Does it cover student loans?
They do not cover student loans.
What is the difference between a secured and unsecured debt?
A secured debt is a debt secured against an asset that you own. Typical secured debts will be a mortgage, a secured loan, car HP etc. An unsecured loan is any loan not secured on an asset such as a bank overdraft, a personal loan, a credit card, store card etc.
What does it mean when a Trust Deed becomes Protected?
This refers to when your Trust Deed proposal is accepted by at least 50% of your creditors, or at least 33% of the debt value is accepted. Once accepted (protected), no further action can be taken against you by your creditors for recovery of the money you owe them.
Do creditors have to accept a proposed Trust Deed?

If your Trustee has not received written objections from a majority in number of your creditors or any creditor(s) owed more than one third in value of your total debt, then the Trust Deed will be registered as protected.

Can an individual creditor refuse to accept my repayment proposal?
Yes, but it only matters if more than 33% of the total debt value is rejected. Once the proposal has become Protected, all creditors are bound by law to accept the terms.
What happens if the Trust Deed is not approved?
When a proposal is drafted, the experience and knowledge of our Insolvency Practitioners ensures that the vast majority (over 98%) are accepted. Remember not all creditors need to agree to the repayment proposal and should the creditors to the value of 67% of the total debt agree to the proposal, the others are then still legally bound by its terms regardless.If not enough creditors accept the proposal, then the IP may still be able to negotiate your case to get it accepted. If not, you will have to come to an informal arrangement with you creditors to repay your debts or consider Sequestration.
What am I committing myself to if I sign?

You are entering into a contract to repay your debts, usually at a reduced rate. As such you agree to:

  • Co-operate with the Trustee (IP)
  • Pay the agreed monthly contribution
  • Not take any further credit
  • Advise the Trustee if you receive any unexpected windfalls in excess of £200.


If you still have questions, or if you would like immediate support, please call now on : 01412971178 or take our Debt Test to see if you’re likely to qualify for support.