Frequently Asked Questions

1. What is a Trust Deed?
2. Am I eligible for a Trust Deed?
3. What do I have to do in a Trust Deed?
4. What is a Protected Trust Deed?
5. How do I make my Trust Deed protected?
6. What are the advantages of a Trust Deed?
7. What costs are involved in a Trust Deed?

1. What is a Trust Deed?

A Trust Deed is a legal process that is only available to residents of Scotland. A Trust Deed offers debtors an alterative to bankruptcy that allows them to take control of their financial situation. Please see our information page for more details.

2. Am I eligible for a Trust Deed?

Trust Deeds are only available to those who have lived in Scotland for at the least 6 months prior to your application. Read more on your eligibility for a Trust Deed.
While there is no minimum level of debt to enter into a Trust Deed, with it being a formal arrangement, if you have a low level of debt, a debt management plan might be a better option.

3. What do I have to do in a Trust deed?

There are a couple of things you must agree to do, to fulfill the contract. These include;

• Paying the agreed monthly amount
• Taking out no further credit
• Informing your Trustee of any unexpected windfalls of over £200
• Providing your Trustee up to date information, like a change of address or a change in financial circumstances
• Co-operation with the Trustee

4. What is a Protected Trust Deed?

If you make your Trust Deed protected, your creditors cannot petition for your sequestration, or use court action to recover any of the debts incurred before the Trust Deed was in place, while you continue to follow the terms of the Trust Deed. A Protected Trust Deed is a legally binding agreement.

5. How do I make my Trust Deed protected?

To start the process of protecting your Trust Deed, the Trustee must place an advert in the Edinburgh Gazette. This is a Government publication, usually read by solicitors and banks, not often read by members of the public.
The Trustee must then write to your creditors, explaining your situation and the payments expected to be made. The creditors then have five weeks to object to the terms laid out in the advert. If no more than one third, or the majority in number, of your creditors object to the terms, the Trust Deed will become protected.

6. What are the advantages of a Trust Deed?

There are a number of advantages to a Trust Deed over things like sequestration (bankruptcy) and a debt management plan.

• Less pressure, as all correspondance with creditors is dealt with by the Trustee
• A sequestration can cost more to administer than a Trust Deed.
• Information on a Trust Deed is not published, unlike a sequestration.
• Stop interest and charges. Creditors cannot add on any interest or charges while in a Trust Deed.
• A protected Trust Deed usually lasts for 3 years, after which any remaining debt is written off.
• You will often be able to remain self employed, director of a company or in public office.

7. What costs are involved in a Trust Deed?

There are no additional costs ontop of your monthly contributions. All administration charges come from the affordable monthly payment that you arrange with your Trustee, and creditors accept a lower payment because of this.
There is also absolutely no set up fee in a trust deed, so you really are only paying what you can afford. For more information see our Trust Deed Cost page