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

online enquiry form

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.

Debt Guide for the Disabled

This free guide explains how disabled people might get into debt, why they are "doubly disadvantaged" and how they can get the debt help they need.

Debt Help Guide for the Disabled

Trust Deeds - Advantages

Can help you to avoid sequestration (bankruptcy) and its damaging effects.
Keep to the trust deed terms and you should be debt-free in just three years.
A trust deed should be an affordable plan, and usually after 36 monthly payments, unsecured creditors agree to write off any outstanding balance.
Interest and charges are frozen when you enter into the trust deed.

Trust Deeds - Disadvantages

A trust deed will affect your credit history, although if you’ve missed payments then your credit history will already have been affected.
You must work closely with the trustee, who may demand you sell assets of excessive value.

Trust Deeds - Jargon Buster

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

This website is operated by Totemic Limited. Totemic Limited is registered in England - Company No.02789854. Consumer Credit Licence Number: 355018. Totemic Limited introduces clients to Payplan Limited (Company No.03783911) and is an Introducer Appointed Representative of Payplan Financial Services Limited (Company No.4328466). Both companies are registered in England. Payplan Financial Services Limited is authorised and regulated by the Financial Services Authority (FSA registration number 302801. Consumer Credit Licence Number:527457). Registered office for all three companies: Kempton House, Dysart Road, Grantham, Lincolnshire, NG31 7LE. Payplan and the Payplan logo are trademarks of Totemic Limited. Totemic Limited may pass customer details to other appropriately authorised and regulated financial services providers where relevant to individual circumstances. Your initial consultation and any quotations are free and you are under no obligation to proceed with any options that may be available to you. If you choose to go ahead with a recommendation, a fee may become chargeable.