Protected Trust Deed

A Trust Deed is a formal and legally binding debt solution available to residents of Scotland. It is an agreement between an individual who is unable to pay his/her creditors in full and an Insolvency Practitioner (the Trustee).

To start a trust deed, you will be required to discuss your financial situation with a licensed insolvency practitioner (your Trustee). The practitioner will require information about your debts and whom you owe money to, as well as your current monthly income and outgoings. From this, you will both come to an agreement as to how much you can afford to repay each month whilst still paying your regular living expenses.

Once you have agreed and signed a trust deed with your insolvency practitioner, the Trustee will write to your creditors with details of the trust deed. If more than two thirds of your creditors agree to the terms, then it becomes a protected trust deed.

Advantages of a Trust Deed

• Trust Deeds provide several benefits for those people struggling to keep up with their debt repayments.

• A Trust Deed will end any threatening letters or payment demands from your creditors. Instead, all correspondence between you and your creditors is handled by the trustee.

• A Trust Deed is usually more flexible and costs less to administer than sequestration (the seizing of property).

• Trust Deeds also allow the debtor to retain their job or business, even if they hold a position in public office or a company directorship whilst self-employed debtors can still continue to trade during the Trust Deed period.

Disadvantages of Trust Deeds

• Your credit rating will be adversely affected

• You are not permitted to be a director of a limited company

• Your home and job could be at risk through sequestration if you can't make all your repayments

• You are committed to a legally binding 3 year repayment plan

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