What are Trust Deeds?

A Trust Deed is a solution for individuals that live in Scotland that have unsecured debts and are struggling with repayments.

It is a legally binding solution that helps people to repay debts at a more affordable rate and is often a good alternative to sequestration (or bankruptcy as it’s known in England, Wales and N. Ireland).

Individuals in a Trust Deed are also protected from unsecured creditors taking further legal action against them and they are no longer allowed to contact them about their debts.

So if you are struggling with your debt repayments, a Trust Deed could be the right solution for you.


The appointed trustee will charge a fixed administration fee and an additional fee based on a percentage of funds collected during the trust deed for the work they do in administering the trust deed. The trustee must give you an indication of what they will charge before the trust deed is signed.

Advantages of a Trust Deed

  • All interest and charges on the debts are frozen on the date the Trust Deed is signed
  • Your Trustee will deal with all creditor correspondence and queries
  • Your creditors are unable to take any further enforcement action against you
  • After paying the Trust Deed for the agreed term (usually 48 months), any remaining debt is written off.

Disadvantages of a Trust Deed

  • Trust Deeds affect your credit rating for six years, starting from the date the arrangement is agreed.
  • You will not be able to take out further credit during your Trust Deed.
  • Homeowners may be required to release equity for the benefit of your creditors
  • If you fail to keep up your payments you may be at risk of Sequestration proceedings against you
  • If you’re a homeowner you may have to sell or re-mortgage, although you may be able to agree to make additional payments into your Trusts Deed in lieu of the equity
  • You may be expected to sell high-value items but certain items may be allowed e.g. a reasonably priced car if required for work and family purposes
  • Your details will be held publicly on the Register of Insolvencies

Trust Deed FAQ’s

To make you aware of all the different aspects of a Trust Deed we have compiled a list of Frequently Asked Questions here.

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