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Sell Your House Whilst in Trust Deed? UK Property Laws

Sell Your House Whilst In a Trust Deed

For free and impartial money advice and guidance, visit MoneyHelper, to help you make the most of your money.

If you live in Scotland and have to pay off your unsecured debts, a trust deed could just be the thing you are looking for. 

While it may seem like a trust deed could put your assets at risk, it is possible to save your assets and pay off your debts at the same time.

So, in this article, I have decided to share the complete overview of a trust deed, FAQs, and everything you need to know about the subject matter.

Can I sell my house while in a trust deed?

You could be able to sell your house in a trust deed. However, this is only possible if your trustee agrees. 

How will my trustee arrive at an equity amount?

It is important to understand that your home is professionally valued. In case you have a mortgage, you could be able to get a redemption from your creditor. Moreover, the redemption amount is the sum you are required to repay the mortgage. This is deducted from the total valuation to arrive at the equity.

What will happen to my property if I have little or no equity?

In case the amount of equity in your property is less than £5,000, your trustee might not include it in your trust deed arrangement. Moreover, if you decide not to sell your home, you could be able to apply to the sheriff court. This could help delay or cancel the sale of your home. 

How will a protected trust deed affect my property?

If you have a sufficient amount of equity in your home, your trustee will keep that into consideration while making your repayments. Trust deed payments will be taken from your income to make your monthly payments. However, the equity in your home could help boost the amount your creditor will receive. 

How can I avoid selling my house in a trust deed?

If you are a homeowner, you could avoid selling your property. 

There are a number of things you could do, such as:

  • Making payments in installments: 

By extending the terms of your trust deed, you could make installments. In case your property is jointly owned, you could ask your partners to help contribute to the installments.

  • Friends and family could make your installments: 

You could ask your friends and family to help raise money on their account to pay your trustee and invest in your property.

  • Your joint owner could buy your share:

In case of a jointly owned property, your partner could buy your share of the property and remortgage it in their name. 

  • Investments made by your joint owner:

Your joint owner could pay a portion of equity to reduce your own liability. 

  • Sale and rent back:

This means you could sell your house to a private firm at discount and then rent it back. 

I would suggest you get legal advice to understand which option is the best for you. 

can you sell your house whilst in a trust deed

Can I remortgage my house while in a trust deed?

Possibly, you could be able to remortgage your house. However, the amount of fees for remortgaging or altering your property’s balance of ownership could be significantly high. 

If your trustee allows, credit reference agencies will be updated about the circumstances. This could help make them less inclined to your loan.

I would suggest you visit a mortgage broker for better advice, 

How will a protected trust deed arrangement differ from an unprotected one?

If you are a homeowner, you might want to take this into consideration.

Protected trust deeds will require you to transfer the ownership of your property and other assets to your trustee. 

However, if you are in an unprotected trust deed and your property has equity, your creditors could take legal action against you. 

Moreover, selling your home to pay off your debt could become the only option. Otherwise, your creditor could force you into a sequestration. 

Can a Scottish trust deed affect my property?

A Scottish trust deed could make it difficult to get a mortgage or a loan in the future. You could be forced into selling your property as well. Moreover, your credit rating could be significantly affected for a period of 6 years.  

Frequently Asked Questions (FAQs) 

How will my trustee use my property to pay off my creditors?
At the beginning of your arrangement your trustee will suggest a sum of equity. This will have to be paid at the end of your trust deed. The amount will be calculated based on the amount of redemption you will get from your bank.
Is my parents property taken into account if I live with them?
If you are in a trust deed and you live with your parents, their property will not be taken into account. Assets taken into account will be based on your consent. However, if they volunteer, their property could be added to your trust deed agreement.
Can I apply for a protected trust deed if my home is jointly owned?
You could apply for a trust in this case. However, your trustee will need permission from your partner. If your partner agrees and a division on sale has been granted, your trusteed will then proceed with the arrangement.
Do I need to inform my landlord before I get into a trust deed?
If you live in a rented house, you are not obliged to inform your landlord about your arrangement. However, if you move to a different property and a rental check is carried out, you might not pass.


Read the instructions and guidelines provided carefully. 

Everything you need to know about a trust deed has been mentioned above.

For more information, speak to your insolvency practitioner or contact us.


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