Trust Deed

A Trust Deed is a debt solution that can be used in Scotland to make affordable repayments over four years and potentially write off some of your debt. 

A Trust Deed is a formal debt solution set up by an insolvency practitioner on your behalf. It commits you to make more affordable monthly repayments for four years. After this time, any remaining unsecured debt is written off. A Trust Deed is not identical to an IVA, but there are some similarities between these legally binding debt solutions. 

The pros

• Your debt repayments should become more affordable based on your circumstances and debts may be written off after the four-year period
• After your Trust Deed is set up, creditors can no longer contact you or add further interest and charges to your debt
• You can often keep one essential vehicle worth < £3,000
• You do not have to appear in court as part of the application process

The Cons

• The insolvency practitioner charges you for their service throughout the four years. This is taken from your single monthly payments
• Trust Deeds can affect your right to work in some professions
• Not sticking to the terms of your Trust Deed can lead to bankruptcy
• Trust Deeds will negatively affect your credit report

More information on Trust Deeds

There is a lot to learn about Trust Deeds before engaging with a debt adviser or insolvency practitioner. You can uncover important details about using a Trust Deed to get out of debt here at MoneyNerd. Check out our articles and friendly guides, written to make understanding Trust Deeds easy.