How to draw up a Trust Deed

11 June2021
Scottish 20 bank notes

Trust Deeds are only available to people in Scotland who are struggling with a large amount of unsecured debt that they cannot afford.

If you're struggling with debts like these, a Trust Deed could help you to regain control of the situation, repay what you can afford for three years, and write off the rest.

You cannot set up a Trust Deed yourself. An Insolvency Practitioner is responsible for drawing up a Trust Deed proposal, because it is a contract and protected by law.

You don't need to be a legal expert yourself - we can help you to set up a Trust Deed.

Speak to a debt adviser

When you speak to one of our debt advisers, we'll be able to discuss your income, your expenses, your lenders and your debts with you. If we think a Trust Deed could help, then we'll explain how the process could work, how much you could expect to repay and for how long. Remember, this debt solution could see you clear those unsecured debts after only three years.

Our debt advisers are ready to take your call. Or, leave some details here and we'll call you.

Making sure a Trust Deed is right

If we thought a Trust Deed could help, we would draw up a Trust Deed proposal. This includes how much you could repay every month, whether you could expect to release equity in your home, and how long the Trust Deed would last, based on what you've told us.

We can arrange for someone to visit you in your own home to go through the proposal with you, or we can discuss it over the phone with you - whatever you feel more comfortable with.

As a Trust Deed is a form of insolvency, it stays on your credit record for three years after it's finished (assuming it was a three-year Trust Deed), which can make borrowing money during that time more difficult. We would discuss pros and cons like these with you, so that you can make an informed decision.

Find out more about Trust Deed Pros and Cons here.

Approaching your lenders with your Trust Deed
If you decided to begin a Trust Deed, we would show your proposal to your lenders. We would also need to advertise your Trust Deed in the Edinburgh Gazette. This gives your lenders time to decide whether they want you to repay this way, or take other action. Lenders can usually recover more of what's owed to them with a Trust Deed than with sequestration, so in many cases they agree to them.

Protected Trust Deed

After five weeks, your Trust Deed becomes a 'Protected Trust Deed', which means it's protected by law. This isn't automatic. If more than half of your lenders disagree with it, or lenders who 'own' more than a third of your debt disagree with it, then it won't go ahead - so we could look at your other options.

Once you enter into a Protected Trust Deed, your lenders cannot make you bankrupt (sequestration) - as long as you continue with the payments you agreed to. They also cannot ask for higher payments than laid down in your original agreement.

Find out if you might qualify for a Trust Deed here.

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