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Protected Trust Deed (Scotland)

There are many things to consider when taking out a trust deed, but don't worry - this guide has everything you need to know.

Trust deeds can be a great way to manage your finances, but it's important to understand the details before signing on the dotted line. We'll cover all the basics here, from what a trust deed is to how it works.


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To find out more about managing your money and getting free debt advice, visit Money Helper, an independent service set up to help people manage their money. National Debt Advice is not associated with Money Helper.

What is a Protected Trust Deed?

A protected trust deed is a legally binding arrangement in Scotland where you make reduced payments over four years. At the end of this time, your unsecured debts are usually written off.


A trust deed is a form of insolvency, so your unsecured debts need to outweigh the value of your assets, such as a house or vehicles. Unsecured debts include things like credit card debt, personal loans and store cards.


Trust deeds are only available if you live in Scotland. If you’re considering a trust deed, it’s important to get our impartial debt advice first. You can only get a trust deed with the help of an insolvency practitioner.

Benefits and Risks

Benefits of a Trust Deed:

With the help of an insolvency practitioner (IP) you arrange repayments to your creditors over four years. After this any remaining debt is written off

Once your trust deed is approved, your creditors won’t chase you for payment or add more interest and charges to your debts, and they can’t take any court action

While you may have to sell some assets, you’re usually able to keep one essential vehicle worth less than £3,000

Although a protected trust deed is a formal debt solution, you don't need to appear in court

Risks of a Protected Trust Deed:

An insolvency practitioner normally takes a charge for their service out of your monthly repayment for your trust deed, so it’s important you understand what percentage this will be

A trust deed may affect the terms of your employment; if you're concerned about this you should check your contract or speak to your HR department

There's the risk of bankruptcy if your trust deed fails

Your credit rating will be affected for six years, starting from the date the arrangement is agreed

How will a trust deed affect me?

You'll have to keep to a budget for the full term of your trust deed: usually four years

In addition to your employment, a trust deed can also affect any hire purchase agreements you might have

Your details will also be added to a public register, called the Register of Insolvencies (ROI), for a period of five years. The register is maintained by the Accountant in Bankruptcy (AiB) and is available for viewing by the general public. It contains all details of current protected trust deeds

There will be restrictions on your spending during your trust deed. You’ll have to stick carefully to a budget to ensure you can afford the monthly payments

There is a charge for the services of an insolvency practitioner, but the fees are deducted from the trust deed fund. This is the total amount of money you are able to offer your creditors and is made up of your monthly payment (over the agreed term) and any assets or equity included.


How do I apply for a Protected Trust Deed?


Your first step is to collect details about your financial situation, including your income, outgoings and debts, our advisors can run through all of this with you.


Then you should see if a Trust Deed is the right debt solution for you. Use our online calculator or speak to one of our expert advisors.


One of our third parties will give you information on how to apply, and explain the risks and benefits of entering a Protected Trust Deed.

Other debt solutions you could qualify for:

A legal process that can provide relief for those struggling with debt.

Provide some relief from debt repayments.

Debt Management Plans can be the ideal solution.

Government Debt Respite Scheme.

A legal process that can help people in England and Wales.

A legally binding arrangement in Scotland.


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Here’s an idea of what the process looks like:

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Complete the Debt Calculator 

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