Tackling your debts

What is a Trust Deed? Part 1

Posted 09 November 2015

Find out which debt solution is right for you

Get started

Answer a few simple questions

See if you are suitable

Understand your next steps

Do you have problem debt and live in Scotland? If so, a Trust Deed could help – read on to learn how they work.

If you’re living in Scotland and struggling with unmanageable debt, you may have heard about Trust Deeds and want to know exactly how they work. Never fear, because in this 3-part series, we’re here to explain all the ins and outs and, hopefully, help you decide whether this is a solution that you should consider.

Just to reiterate, this solution is only available to residents of Scotland, if you are looking for a solution but you live in England an IVA is a similar alternative that might help.

How it works?

A Trust Deed is a debt solution designed for people who have debts that they may be able to partially pay off, but crucially, they won’t be able to pay everything back in a reasonable amount of time.


A Trust Deed allows you to pay an affordable amount towards your unsecured debts every month. The agreement usually lasts for four years, after which time the rest of your debt would be written off.  This means when you start your Trust Deed you have a date to look forward to when you’ll be debt free. It can provide real relief and peace of mind for people dealing with debts that they genuinely can’t afford to pay back and give you a chance to start again financially.

A Trust Deed is a legally binding agreement and you can’t arrange one directly with your creditors, you need to go through an Insolvency Practitioner who would act as your Trustee (the person who oversees your Trust Deed) throughout the agreement.

Am I eligible?

To be eligible for a Trust Deed you have to have a minimum of £5,000 in unsecured debts.  A Trust Deed may not be suitable for people with certain jobs - certain positions of authority could be affected such as police officers, firemen or as a prison officers. This also might not be the right solution for you if you worked as an accountant, solicitor or in management position in a bank, or if you wanted to enter into these professions in the future.

What debts are allowed to be part of a Trust Deed?

Trust Deeds can only help you deal with unsecured debts, so would not cover missed mortgage payments, hire purchase, or secured loans in most cases. Here’s a list of debts that can be included in a Trust Deed: 

·         credit cards
·         unsecured loans
·         payday loans
·         catalogues
·         storecards
·         HMRC debts

That’ll do for today, we don't want to overload you with too much information. So, come back tomorrow for part 2, where we’ll look at the restrictions you’ll have on you while you’re on a Trust Deed. 










by Christine Walsh

Back to blog home

Did you find this useful? Share it with others!

To find out more about managing your money and getting free debt advice, visit Money Advice Service, an independent service set up to help people manage their money.