Scottish Trust Deed
A Scottish trust deed is a formal Scottish insolvency procedure, usually lasting four years, in which a person transfers their assets to a trustee for the benefit of creditors. At the end of the term, any remaining debt is written off. It is broadly equivalent to an Individual Voluntary Arrangement (IVA) in the rest of the UK.
A Scottish resident with £25,000 of unsecured debt enters a protected trust deed for four years. They make affordable monthly contributions; at the end of the term any remaining qualifying debt is written off.
- A trust deed is only available to Scottish residents. People in England, Wales or Northern Ireland use an IVA instead.
- Only a 'protected' trust deed gives full creditor protection. An unprotected trust deed does not bind dissenting creditors. Most trust deeds are protected.
- A trust deed affects your credit file for six years from the date it is registered.
Why it matters
A Scottish trust deed is a serious debt solution. It is formal, legally binding (when protected), and shows on your credit file for six years. In return, it freezes interest and charges, protects from enforcement, and writes off any remaining qualifying debt at the end of the term.
It suits people in Scotland with substantial unsecured debt, regular income, and an inability to clear the debt within a reasonable period through informal arrangements or DAS.
A licensed insolvency practitioner sets up the trust deed and acts as trustee. They are paid from your monthly contributions, so the available repayment to creditors is what remains after fees.
Common confusion
People sometimes confuse a trust deed with an IVA. The principles are similar:
- Both are formal, legally binding insolvency procedures
- Both involve a fixed term with debt write-off at the end
- Both stay on your credit file for six years
The differences are practical:
- Trust deeds are Scottish; IVAs are for the rest of the UK
- Typical trust deed term is four years; typical IVA term is five to six years
- Asset rules, especially around homes and vehicles, differ between the two systems
A second confusion is between protected and unprotected trust deeds. Only a protected trust deed binds all creditors (including those who voted against it). An unprotected trust deed only binds those who agreed. In practice, most trust deeds are protected, but always check before signing.
Free help in Scotland
- Citizens Advice Scotland (cas.org.uk)
- StepChange Scotland (stepchange.org)
- Accountant in Bankruptcy (aib.gov.uk)