Trust Deed / Protected Trust Deed

A Trust Deed is an agreement with your creditors to repay part of what you owe. Typically lasting four years, a Trust Deed allows you to make affordable monthly payments. If you adhere to the terms and make all required payments, any remaining debt is written off at the end of the term.

Benefits

Interest and charges are frozen once your Trust Deed becomes protected.

Your home may not be at risk if the arrangement doesn’t require it.

One affordable monthly payment simplifies your finances.

Creditors cannot take further action against you once the Trust Deed is protected.

Considerations

Assets may need to be transferred to the trustee, who could sell them to repay creditors.

Your credit file will be affected.

If not protected, only creditors who agree to the Trust Deed are bound by its terms.

Failure to cooperate with the trustee may lead to bankruptcy.

Examples of debts that can be included*

Credit & Store Cards

Personal loans

Catalogues

Overdrafts

Buy Now, Pay Later

Payday loans

Examples of debts that may be included*

Utility bill Arrears
(gas, electric, water)

HMRC debts
(self-assessment)

Benefit overpayments
(DWP or local authority)

Council Tax Arrears

Rent arrears

Debts to friends or family

*Depending on the situation we may be able to include these. If we can’t, we may be able to help you budget for them outside of the plan.

Examples of debts that cannot be included*

Child maintenance arrears

Student loans

Secured loan arrears

Court fines

Mortgage arrears

Car financing arrears
(including PCP & HP)

*We may be able to help you budget for these outside of the plan.

If your debts include both types, our advisers will guide you on how best to manage your overall financial situation.

How can Debt Support Service help?

Our knowledgeable team can assess the best option for you and connect you with trusted partners who can administer the arrangement.

FAQS

FAQ's

What is a Trust Deed?

A Trust Deed is a voluntary but legally binding agreement between you and your creditors. You agree to make affordable monthly payments over typically 4 years. At the end, any remaining included debts are written off.

Is a Trust Deed the right choice for me?

Trust Deeds suit people who:

· Live in Scotland

· Have unsecured debts over £5,000

· Can afford regular monthly payments but can’t repay debts in full.

How does a Trust Deed work?

Your Insolvency Practitioner becomes your trustee and manages communication with creditors. You make one monthly payment, which is distributed to your creditors. Once the Trust Deed becomes “protected,” creditors can no longer take legal action against you.

What debts are covered?

Most unsecured debts, including:

· Credit cards and loans

· Overdrafts

· Council tax arrears

· Payday loans

· Secured debts like mortgages are not included.

How do I set up a Trust Deed?

A Trust Deed must be set up and managed by a licensed Insolvency Practitioner. They’ll assess your situation and help propose a plan to your creditors.

Can I pay it off early?

Yes. If your income increases or you receive a lump sum (e.g., inheritance), you may be able to settle your Trust Deed earlier.

Will a Trust Deed affect my credit rating?

Yes, a Trust Deed will appear on your credit file for six years from the date it begins. This can make it harder to obtain credit during and shortly after the arrangement.

Will a Trust Deed affect my car or home?

It may. If you own a home, you may be asked to release equity to help repay your debts. Cars worth over £3,000 might also be considered an asset, but you may be able to keep them if they’re essential for work or family.