A Trust Deed is a formal agreement with your creditors that the debtor enters into voluntarilly. Once in the agreement, the debtor then arranges an affordable monthly repayment schedule, with the Trustee. Trust Deeds are only available in Scotland, and are an alternative to bankruptcy (known as sequestration). They are similar to an Individual Voluntary Arrangement (IVA) in England, Wales and Northern Ireland.
There are certain conditions that can be met in order to turn the Trust Deed into a Protected Trust Deed. This stops the creditors from petitioning for the debtors sequestration, aslong as they abide by the terms of the trust deed.
There are many advantages to a trust deed, including the reduced pressure of not having hassling letters from creditors. There are also cost benefits, as it often costs less to enter into a trust deed than to administer a sequestration.
There are no set up costs, no additional payments over the agreed amount and usually your lenders accept reduced monthly payments, that you can afford.