Featured in...
Dashboard
Trust Deed

Trust Deed Rules – What You Need To Know

Scott Nelson Profile Picture Janine Marsh Profile Picture
By
Scott
Scott Nelson Profile Picture

Scott Nelson

Managing Director

MoneyNerd’s founder, Scott Nelson, has a decade of financial industry experience, including 6 years in FCA regulated loan and credit card companies. Troubled by a lack of conscience in the industry, he founded MoneyNerd to give genuine advice to those in debt and struggling financially.

Learn more about Scott
&
Janine
Janine Marsh Profile Picture

Janine Marsh

Financial Expert

Janine Marsh is an award-winning presenter and a valuable member of the MoneyNerd team. With a wealth of experience as a financial expert, she's been featured on BBC Radio 4, BBC Local Radio, and BBC Five Live, and is a regular on Co-op Radio.

Learn more about Janine
· Feb 6th, 2024
Could you legally write off some debt? Answer below to get started.

Total amount of debt?

For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.

For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.

Featured in...
Trust Deed and Rules

For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.

If you need to know about trust deeds and their rules, you’re not alone. Many people have worries about debt and trust deeds.

In fact, over 170,000 people visit our website every month seeking advice on debt solutions. We’re here to help you understand trust deeds better. 

In this article, we’ll talk about:

  •  What a trust deed is
  •  How much debt you need to have to get a trust deed
  •  What happens if you get extra money while you have a trust deed
  •  If you can get credit while you have a trust deed
  •  How to know if you can get a trust deed

We know it’s hard to have debt. But don’t worry; our team knows a lot about trust deeds. We can help you understand them better.

Could you legally write off some debt?

There are several debt solutions in the UK, choosing the right one for you could write off some of your unaffordable debt, but the wrong one may be expensive and drawn out.

Answer below to get started.

How much debt do you have?

This isn’t a full fact find. MoneyNerd doesn’t give advice. We work with The Debt Advice Service who provide information about your options.

What are the rules of a trust deed?

If you are in a trust deed, you have to follow the rules and regulations. 

  1. It is crucial that you make your monthly payments on time. 
  2. Some trust deeds may suggest that you can not be a company director. However, you could speak to your trustee and get permission. 
  3. In case you receive new money or property (e.g. windfall), you have to inform your trustee about it. 
  4. Moreover, it is essential you cooperate with your trustee. Otherwise, they could force you into a sequestration.

How do I know I am eligible for a trust deed? 

The trust deed criteria are simple:

  • You are expected to either be a Scottish resident or have lived in Scotland for over a year. 
  • Furthermore, it needs to be demonstrated that you have been unable to pay off your debts for a significant period of time. You should also be aware of what a trust deed Scotland wage increase entails. As such, you should speak to an adviser before entering into a trust deed.

How much debt do I need to enter into a trust deed?

You need to have a minimum amount of £5,000 worth of unsecured debt. However, if you have debts less than this, your trustee could suggest an alternative debt solution. This may include:

  • Debt Arrangement Scheme (DAS): A scheme set up by the Scottish government to pay off debts. In this case, your interest and charges are frozen. However, this could affect your credit rating. 
  • Sequestration: You will be expected to make payments over a period of time only if you can afford them.
  • Debt Consolidation Loan: Withdrawing new credit to pay off your current credit.

Do I have to inform my trustee if I receive a windfall?

Yes, it is crucial that you inform your trustee about any sort of increased income. This can include a lottery or a windfall. 

If you fail to do so, you could find yourself in a risky situation which may impact your trust deed’s validity. 

How a debt solution could help

Some debt solutions can:

  1. Stop nasty calls from creditors
  2. Freeze interest and charges
  3. Reduce your monthly payments

A few debt solutions can even result in writing off some of your debt.

Here’s an example:


Situation

Monthly income £2,504
Monthly expenses £2,345
Total debt £32,049

Monthly debt repayments

Before £587
After £158

£429 reduction in monthly payments

If you want to learn what debt solutions are available to you, click the button below to get started.

Get started

Can I make amendments to my trust deed?

You could be allowed to make an amendment to your trust deed under certain conditions. 

These conditions include:

  • Your financial situation has improved, and you want to pay off your debts differently in relation to the financial adjustment. 
  • Your financial situation has worsened, and you are now unable to make monthly payments. 
  • You have received a windfall. 
  • You want your trust deed to become protected. 

It is important to understand your trustee will only make the changes if your creditors agree.

Can I get credit while in a trust deed?

You may be able to get credit during your trust deed, and this will not be included in any trust deed repayments. However, this process will be difficult, and it may impact the success of the trust deed (because you will have to focus on multiple repayments).

It’s also important to note that in the first two years after you have been discharged, you may struggle to get any form of credit.

Can I apply for a moratorium while in a trust deed?

You could apply for a moratorium through the Accountant in Bankruptcy if your trust deed is not yet protected. This will prevent your creditors from forcing you into making payments. 

However, a moratorium only lasts for 6 months. Moreover, you can only apply for a moratorium once in 12 months. 

» TAKE ACTION NOW: Fill out the short debt form

Are there any other options?

Deciding how to tackle your debt is a very personal decision and you certainly can’t get the answer through a simple blog post.
It’s made worse by the strong opinions you’ll often find online.

The best option is to get help from a debt expert to find out all your options and see which is right for you.

I’ve partnered with The Debt Advice Service and you can access their expert support by filling out the short form below.

Get help from The Debt Advice Service.

Thousands have already tackled their debt

Every day our partners, The Debt Advice Service, help people find out whether they can lower their repayments and finally tackle or write off some of their debt.

Natasha

I’d recommend this firm to anyone struggling with debt – my mind has been put to rest, all is getting sorted.

Get started

Reviews shown are for The Debt Advice Service.

Can I apply for a trust deed if I run my own business? 

According to the trust deed regulations, you might not be allowed to run your own business. 

However, your trustee could arrange for someone to run your business for you for a certain period of time while you are working through the trust deed. 

Please note: If your financial condition worsens, you could be forced into selling your business. 

Frequently Asked Questions (FAQs) 

Will my trust deed require me to sell my assets?
If you make your monthly payments on time, you may not have to sell your assets. However, if you are unable to keep up with the charges, your trustee could sell your assets to pay off your creditors.
Who is the governing body for Trust Deeds?
The Accountants in Bankruptcy look over the trust deeds. The AiB administers all Trust Deeds however each Insolvency Practitioner is licensed by their own regulatory body. The Insolvency Practitioners are regulated by the Insolvency Practitioners Association
What is an occupational pension scheme in a trust deed?
A trust based pension scheme is established by an employer. This is made to provide benefits to the employees. These benefits are given to the employees on final salary, career -average, and money purchase basis.
What does the standard pension scheme include in a trust deed?
The standard pension schemes include drafting notes. These are integrated within texts. You could be able to review the documents without the integrated drafting notes.
How long will it take for me to get discharged?
On average it takes 4 years to get discharged from a trust deed. After this your remaining debts will be written off. 
Could you legally write off some debt?

Answer below to get started.

How much debt do you have?

This isn’t a full fact find. MoneyNerd doesn’t give advice. We work with The Debt Advice Service who provide information about your options.

Did you like this article?
Show your support ❤️
We're glad you liked the article! As a small team, your support means everything to us. If you could rate us on Google, it would be amazing. Thank you!
We are so sorry...

Is there something missing? We’re all ears and eager to improve. Send us a message and let us know how we can make our article more useful for you.

You can email us directly at [email protected] to share your feedback.

The authors
Scott Nelson Profile Picture
Author
MoneyNerd’s founder, Scott Nelson, has a decade of financial industry experience, including 6 years in FCA regulated loan and credit card companies. Troubled by a lack of conscience in the industry, he founded MoneyNerd to give genuine advice to those in debt and struggling financially.
Janine Marsh Profile Picture
Debt Expert
Janine Marsh is an award-winning presenter and a valuable member of the MoneyNerd team. With a wealth of experience as a financial expert, she's been featured on BBC Radio 4, BBC Local Radio, and BBC Five Live, and is a regular on Co-op Radio.