Trust Deed Explained | Advice from Government Debt Advices

A Trust Deed is Government legislation that is designed to help Scottish residents clear debt. It is a legally binding arrangement between you and your creditors where you agree to repay a percentage of your total debts based on what you can realistically afford over a period of 36 months. The remainder of this debt will then be written off and you will be free from debt.

A Trust Deed differs from many other financial solutions in that it can be much more flexible and affordable while at the same time providing protection from your creditors.

To enter into a Trust Deed you will need the help of a licensed Insolvency Practitioner who will assist you with the preparation work. This person will be known as the “Trustee”. The Trustee will go through all details with you prior to signing the Trust Deed and then proceed to liaise with your creditors on your behalf. Later, in the case of the Trust Deed becoming protected, the Trustee will distribute contributions to your creditors and administer your Trust Deed.

The arrangement usually lasts for a period of 36 months in which you have agreed to a monthly payment schedule based on what you can actually afford. Once this has been agreed all documentation is drawn up and sent to you for signing. The Trustee will then place a notice and your creditors will have 5 weeks to respond with their decision. The Trust Deed will then become protected if less than one third of your creditors submit a written rejection against it.