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Protected Trust Deed 

What is a Trust Deed?

A protected trust deed is a legally binding arrangement in Scotland, usually lasting for a duration of 4 years, although a longer period can be considered depending on your circumstances. You agree to pay a regular amount of money towards your debts and at the end of a fixed time the rest of your debts will be written off.
A trust deed is a form of insolvency, so your unsecured debts need to outweigh the value of your assets, such as a house or vehicles. Unsecured debts include things like credit card debt, personal loans and store cards.
Trust deeds are only available if you live in Scotland. If you live in England, Wales or Northern Ireland, an Individual Voluntary Arrangement (IVA) is a similar solution, but it’s important to note that it has different benefits, risks and fees associated with it.

How it works

All your belongings and property (assets) are given to someone who will look after your financial affairs. They are called your trustee. The trustee aims to pay your creditors as much as possible of the debt owed to them. This may involve the sale of some of your assets so that the money raised can be paid to your creditors.
A trust deed can become ‘protected’ if most of your lenders are happy with the terms of the trust deed. This means that the trust deed is compulsory on all creditors, and they cannot take any steps to recover their money.
If a trust deed is not ‘protected’, it will not be binding on all of your lenders, and they could still take action to recover the money owed to them.


  • You will make one affordable monthly repayment for a fixed period, usually 4 years.
  • Once approved, interest and charges are guaranteed to be frozen.
  • You will stop receiving letters and phone calls from your creditors and debt collectors.
  • Any legal action against you in respect of recovering the debts, such as bailiffs, will stop.
  • If you have a debt in joint names with someone else, this can be included in the Trust Deed. However, your creditors may still chase the other person for all the debt.
  • The outstanding balance of unsecured debts included within the Trust Deed will be written-off at the end; however, any unsecured debts not included will remain outstanding.
  • If you are a homeowner, your house will be protected.
  • Although a protected trust deed is a formal debt solution, you don’t need to appear in court.


  • Details of your trust deed will be added to the Register of Insolvencies.
  • Your credit rating will be impacted for six years.
  • If your trust deed fails, it could lead to sequestration and interest that was suspended could be added to your debt.
  • In order to have the trust deed protected, a majority of your lenders have to approve.
  • While you may have to sell some assets, you’re usually able to keep one essential vehicle worth less than £3,000.
  • A trust deed is a form of insolvency, and having one can lead to disciplinary action or dismissal in some jobs, such as those in financial services or the legal profession.
  • There are fees involved, but these do not impact on your payment, which will always be calculated as an amount affordable to you.
  • If you are a homeowner, you may need to release equity from the value of your home, which may attract a higher rate of interest. If no remortgage is available, the Trust Deed may be extended for 12 months.
  • To ensure the repayments are fair to you and your creditors, there are restrictions on the expenditure of a person who enters into a Trust Deed.
  • If you have a windfall, such as an inheritance or a lottery win, you will need to pay a proportion of this into the PTD.
  • You cannot be a company director and if you are self-employed, the trustee may arrange for someone else to run the business or even sell it.
  • Creditors can object to the Trust Deed becoming protected.

How will a trust deed affect me?

In addition to your employment, a trust deed can also affect any hire-purchase agreements you might have.
Your details will also be added to a public register, called the Register of Insolvencies (ROI), for a period of five years. The register is maintained by the Accountant in Bankruptcy (AIB) and is available for viewing by the public. It contains all details of current protected trust deeds.
There will be restrictions on your spending during your trust deed. You’ll have to stick carefully to a budget to ensure you can afford the monthly payments.
There is a charge for the services of an insolvency practitioner, but the fees are deducted from the trust deed fund. This is the total amount of money you are able to offer your creditors and is made up of your monthly payment (over the agreed term) and any assets or equity included.

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