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How Long Does a Trust Deed Last? Quick Answer 2022 Rules

How Long Does a Trust Deed Last

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

Are you stuck with debt and don’t see a way out? Are the loans piling up and you don’t know what to do?

A trust deed may just be the solution you’re looking for. In this guide, I’ll be discussing trust deeds, their role as a debt solution, debt advice lines, and more. I’ve also added an FAQ section for further clarity.

Let’s get right into it.

What is a trust deed?

Trust deeds are legal arrangements that make it easier for you to pay your debts back.

To put it simply, a trust deed is a debt arrangement scheme that allows you to make monthly payments to your creditors towards your debt over a period of four years.

These payments are made to your creditors in the form of monthly instalments. If the period of your trust deed expires and you still owe money in debt, it is written off and you’re classified as completely debt-free.

There are certain conditions that you have to meet to qualify for a trust deed

Also, trust deeds are only valid options in Scotland. They don’t exist in England or Wales. If you’re not in Scotland, you’ll have to get an adviser who then helps you get an IVA or a DMP.

How Long Does a Trust Deed Last

How long does a trust deed last?

A trust deed, in general, is meant to last around four years. However, there are exceptions to the rules.

When can a trust deed last more or less than four years?

This section addresses the potential situations where your trust deed can last less or more than four years. This means that you won’t be listed on the register of insolvencies any longer once it is no longer active.

Let’s get into it.

  • When your income decreases rapidly/suddenly

Your trust deed can take more than four years to complete if your income fluctuates regularly and you suffer an immediate decrease in your income.

If the decrease is so prominent that you cannot afford to make payments on your trust deed for a while, you could take a break from making these payments.

This would mean that the total duration of your trust deed would go beyond four years and you’ll be listed on the register of insolvencies for some time after your trust deed was originally expected to end.

When you enjoy a spontaneous rise in your income levels, you could be expected to contribute more towards your trust deed each month than you currently do.

If this happens, you’ll be expected to contribute more towards your monthly payments. Since you’re paying more towards these instalments, it’s highly likely that you’ll be done with your trust deed before its actual expiry date.

  • When you happen upon a large sum of money

If you suddenly happen upon a very large sum of money during your trust deed, you could be able to pay your debts back as a lump sum.

If you’re able to pay your debt back in full, you definitely should. It will only be written off if you can’t afford to pay it for as long as the length of a trust deed.

What types of debt does a trust deed apply to?

This section addresses the types of debt that you can cover with a trust deed.

Let’s get right into it.

A trust deed only applies on debts that are unsecured. If your debts are not secured against some form of collateral, you can apply for a trust deed.

This means that if your debt comprises loans such as personal loans, credit card loans, overdrafts, or other unsecured loans, you can apply to get a trust deed for your loans.

This, of course, is a legally binding venture. It does not cover debts that are secured against your property or other assets, such as a mortgage loan. 

Therefore, if you’re aiming to get a trust deed, you can apply for one through an insolvency practitioner.

The role of the insolvency practitioner will be to act as trustee. A trustee in this regard is a third party that is responsible for dealing with creditors on your behalf.

Just like it seems, trust deeds require the existence and involvement of a trustee, particularly because of the need to negotiate and communicate with creditors.

The trustee will be responsible for a lot of what happens during the course of the arrangement. You should stay in contact with the trustee and stay updated about your credit file.


What happens at the end of a Trust Deed?
At the end of a trust deed, any remaining debt amount you have is written off and you don’t have to pay it anymore. Moreover, you’re free from the financial restrictions of the trust deed.
When does a trust deed become a protected trust deed?
Your trust deed becomes a protected trust deed when half of the lenders that are responsible for a minimum for one third of your degree agree to it. A protected trust deed, as the name suggests, is a trust deed that is legally binding and protected by law for as long as it is active. Of course, it is only protected if you keep making your monthly payments.
Is a trust deed worth it?
It depends. A trust deed is certainly worth it if it helps you gain more control over your debts and helps you manage them more effectively. If you can afford to make repayments regularly to your creditors under the supervision of a trustee, a trust deed can certainly be worth it.
What are the alternatives to a scottish trust deed if I live in England?
Alternative debt solutions to a trust deed include IVAs in England. Essentially, IVAs as debt solutions follow the same principle as do trust deeds. You’ll find insolvency practitioners willing to take your case up and get you an IVA if you like in England.
Does a Trust Deed affect credit rating?
Yes, a trust deed can certainly affect your credit file. If you keep missing payments on your trust deed, it can pose a significant harm to your credit rating. Alternatively, if you act in a financially responsible manner and pay your monthly instalments regularly, a trust deed can even improve your credit rating.significantly. Ultimately, it depends on the question of how well you manage your income and expenditure, and how your debt management practices play out.
Can I pay my trust deed before it expires?
Yes, you can pay your trust deed sooner that it is originally scheduled. If you have the resources to increase the amount you pay in monthly instalments, you’re allowed to do so.

Wrapping it Up

If you’re a Scotland citizen, a trust deed is a long and effective method to help you manage your debt.

It will help you become more responsible towards your debts. Also, a trust deed could help improve your living standards.

If you need more advice on your financial situation, feel free to reach out.


Are you struggling with debt?
Are you struggling with debt?
  • Affordable repayments
  • Reduce pressure from people you owe money to
  • Stop interest and charges from soaring