What is a Scottish Trust Deed?
A Scottish Trust Deed is a voluntary agreement, available to residents of Scotland, which allows you to repay only what you can realistically afford (this is the amount you have left over after your living costs have been accounted for) for a period of 48 months.
After that time, you are discharged from any outstanding liabilities that have been included in the Trust Deed, no matter how much has been paid into the arrangement.
A qualified Insolvency Practitioner is appointed as Trustee and the rights to any assets you own will be transferred to them. They will look to sell these assets if they believe there is any beneficial interest (surplus value after secured debts are taken into account) to pass on to your unsecured creditors. The Scottish Trust Deed cannot prevent creditors from petitioning for your sequestration unless it is given protected status (see What is a Protected Trust Deed).
Even if your creditors don’t agree to the Trust Deed becoming protected, you are still able to proceed. The main differences are that your creditors will still be able to petition for your Sequestration if they wish and any creditors that objected to the Trust Deed becoming protected are still able to chase you for the money you owe them. However, in reality, if your Trust Deed is not given protected status, Sequestration, an informal Debt Management Plan or a Debt Arrangement Scheme Payment Plan are likely to be more appropriate solutions for you.
Debt Advice Foundation is a registered UK charity offering free, confidential debt advice. If you need advice about a Scottish Trust Deed or would like to see if you qualify, please call the charity’s helpline to speak with a Advisor on 0800 043 40 50.