Write off your remaining debt with a Trust Deed over 48 months

A Trust Deed is Scotland’s equivalent of an Individual Voluntary Arrangement (IVA), but the two operate under different legislation. Trust Deeds are governed by the Bankruptcy (Scotland) Act 2016 and are administered by a Trustee, while IVAs fall under the Insolvency Act 1986 and apply in England, Wales, and Northern Ireland. Trust Deeds typically last 48 months rather than 60, and creditors have five weeks to object rather than voting at a meeting.

A Protected Trust Deed typically lasts 48 months (4 years). During this time you make one affordable monthly payment to your Trustee, who distributes the funds to your creditors. At the end of the 48-month term, any remaining unsecured debt included in the arrangement is written off.

You will not be forced to sell your home as part of a Trust Deed. However, if you are a homeowner, you may be asked to release equity from your property during the term. Your Trustee will assess whether this is possible and affordable. If you cannot remortgage, alternative arrangements may be made, such as extending the payment term.

When your Trustee submits the Trust Deed, your creditors have five weeks to object. If a majority of creditors by value do not object, the Trust Deed becomes “protected” and is legally binding on all creditors. In practice, most Trust Deeds are accepted without issue. Your Trustee handles all communication with creditors on your behalf.

Certain debts cannot be included in a Trust Deed. These include secured debts such as your mortgage, student loans, court fines, and child maintenance arrears. However, most forms of unsecured debt — including credit cards, personal loans, overdrafts, store cards, and catalogue debt — can be included in the arrangement.