A Trust Deed and a Debt Arrangement Scheme (DAS) are two great debt solutions for individuals suffering from debt.

Having the right information about these options can help you make a solid decision about which debt solution would be most suitable for your financial situation

In this article, I’ll be guiding you through the whats, hows and whys of the two mentioned solutions.

What is a Trust Deed?

A Trust Deed is an optional agreement between a lender and a borrower which has a third party (trustee) in it. A trust deed allows the transition of a person’s property and assets’ legal ownership to a third party; This could be a bank or a title company which holds it as security between a borrower and a lender.

What is a Debt Arrangement Scheme?

Debt Arrangement Scheme or DAS is a solution drafted by the Government for debt holders to pay off their debts in full over an extended period of time without the ultimatum of legal action by creditors.  

Trust Deeds and Debt Arrangement Schemes are debt solutions that are only available to you if you’re a resident of Scotland.

What is the difference between a Trust Deed and a Debt Arrangement Scheme?

A Trust Deed is for people who have unpaid debt over the amount of £5,000.

While on the other hand, a DAS is for people who have debt of £5,000 or less.

A Debt Arrangement Scheme (DAS) allows you to pay your debt over a long period of time. The length of time can be from 4-5 years to 12 years or so, depending on the provided debt solution.

Trust deeds typically last 4 years. 

When Should I Opt for a Trust Deed? 

If you have unsecured debts that total up to more than £5000 and you wish to clear those debts within 4 years, then you should definitely be looking at trust deeds as a worthwhile solution. 

The great thing about trust deeds is the fact that you will have an advisor that will help you come up with a payment plan so you can afford your monthly payments towards your creditors. 

Another great thing about trust deeds is the fact that it’s a legally binding agreement. This means that once a trust deed has been accepted and put in place, your creditors cannot pursue legal action against you (for example, trying to make you bankrupt). 

Furthermore, once a trust deed has been put in place, your creditors also cannot add interest or charges on your debt(s).

A trust deed typically only lasts 48 months (4 years). After this, all remaining debt(s) that you had towards your creditors will be written off. 

When it comes to your valuable assets, they are passed onto a third party, known as the trustee. It’s the job of the trustee to repay your creditors as much of your debt as possible. This may include some of your belongings being sold off so that money can be raised in order to pay your creditors.

That being said, a trust deed does have some shortcomings. For example, its eligibility criteria dictate that you can only qualify for a trust deed if you have unsecured debts that total up to more than £5,000. 

Hence, if your debts total up to less than that, then a trust deed would not be feasible for you.

people manage their money and getting free employment status

When Should I Opt for a Debt Arrangement Scheme (DAS)? 

A DAS is something that is often preferred by homeowners that have a large amount of equity in their home. 

This is because a DAS protects them from bankruptcy. 

That being said, it’s important for you to note that mortgage payments still need to be made. 

A DAS will include you making monthly payments towards your creditors as part of a Debt Payment Programme (DPP). 

This debt payment programme is produced after you have calculated your essential expenditures and determined the amount you can afford to contribute towards your DAS each month.

You can also choose to opt for a DAS if you have debt that totals up to less than £5,000. This is because a DAS could allow your debt to be repaid much more quickly than a trust deed would. 

It’s important to note that a DAS involves you paying the entirety of your debts that you have towards your creditors over the course of a certain period of time. 

On the other hand, a trust deed involves some portion of your debt being written off. 

A DAS can be a great option for you if you have enough money to make regular payments that would result in your debt being paid off in a reasonable time. 

A debt arrangement scheme would also be suitable for you if you don’t want to have to sell your home or if your employment might be affected by other options such as a protected trust deed or sequestration. 

For example, if you have a job in the financial sector, then going bankrupt would cause you to be dismissed. Similarly, becoming bankrupt or opting for a trust deed can prevent you from acting as a company director. 

For further debt advice on which of these debt solutions might be right for you, you can contact an independent charity such as Stepchange or Payplan.


Trust deeds and debt arrangement schemes are both great options that can help you take care of your debts towards your creditors effectively. 

That being said, not every debt solution is suitable for everyone. This is why it’s important that you do your research and seek professional debt advice in order to determine which solution would be right for you.

About the author

Scott Nelson

Scott Nelson is a financial services expert, with over 10 years’ experience in the industry, including 6 years in FCA regulated companies. Read more
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