Scottish Trust Deeds: A Guide
A trust deed requires you to make a regular affordable payment to your unsecured creditors usually for 36 months, after which they agree to write off any remaining debt.
Trust deeds – things to consider
A trust deed is both an affordable way of addressing your debts, as well as a debt strategy that prevents a creditor from petitioning you for sequestration (bankruptcy); as long as you keep to the terms of the trust deed.
A trust deed is administered by a licensed Insolvency Practitioner known as a Trustee. The Trustee will negotiate an affordable level of repayment with your creditors on your behalf, and then once creditors have accepted this proposed repayment then interest and other charges are frozen while you make the agreed repayments, usually for 3 years.
You must not take out any other credit for the term of the trust deed, and you must inform the Trustee if you receive any unexpected windfall. Additionally, if you’re a homeowner, you may be asked to release some equity in your home if possible.
Benefits of a trust deed
A trust deed can be a viable alternative to sequestration, which is a very serious process, and can cause you to be disqualified from holding positions such as Member of Parliament, Justice of the Peace, governor of a school, member of a Local Authority, or a company director.
Interest and charges on your unsecured debts are frozen from the date a trust deed is issued, and a trust deed is also designed to allow you to repay an affordable amount for three years, after which (assuming you’ve kept to the terms) your unsecured creditors will write off any remaining debt.
You will also be protected from being petitioned for sequestration for as long as you keep to the terms of the trust deed.
Frequently Asked Questions about Trust Deeds
Other effects of a trust deed
A trust deed will be registered on your credit history, and as a result you may find it difficult to obtain credit in future.
Additionally you would be required to work closely with the Trustee, and sell any possessions deemed to be of excessive value in order to go towards repaying your debts; for example if you owned a sports car, then it would be deemed appropriate to replace this with a more sensible model.
You may also be required to release a certain amount of equity in your home to go towards repayment of your debts.
Thinking about a trust deed?
A trust deed might be a suitable debt strategy for you although there may well be more suitable debt solutions available to you, depending on your circumstances. Payplan Limited introduces customers for Trust Deeds to Payplan (Scotland) Limited, who specialise in providing debt solutions for residents of Scotland.
For advice on using a trust deed as a debt strategy, call Payplan FREE on 0800 316 1832 or use the
Not right for you? Read about other debt solutions that may suit you better: Sequestration, Debt Arrangement Scheme (DAS), Low Income, Low Assets (LILA), Buy-To-Let Mortgage, Bridging Loan, Remortgage, Debt Management Plan, Full & Final Settlement, Self-Managed Arrangement, Equity Release, Debt Consolidation Loan.
Payplan Limited introduces customers for Trust Deeds to Payplan (Scotland) Limited, a limited company registered in Scotland (Register No: SC400113). Registered Offices: Payplan (Scotland) Limited, Edinburgh Quay, 133 Fountainbridge, Edinburgh, Scotland, EH3 9BA. Licensed Insolvency Practitioner: NT Payne ACA FCCA MIPA MABRP. Licensed by the Insolvency Practitioners Association (UK). Consumer Credit Licence Number: 0645202.