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If you have many bad debts, a Scottish Trust Deed can help you to manage the debts in a better way. Instead of you having to pay the many debts individually, the Scottish Trust Deed will consolidate them into one debt with zero interest rate which you will have to pay back in monthly installments. To qualify for a Trust Deed, you must be a resident of Scotland.


Before you enter into a Scotland Trust Deed, you should be aware of how it will change your life. While the Deed can help you manage your debts and clear them over a short time, your financial capability will be restricted. You will not have to deal with different creditors since all the debt will have been consolidated into one. Moreover, you will have a lighter debt since the interest rate will be frozen at zero.

The Advantages of a Trust Deed

Some of the advantages of entering into a Trust Deed include:

  1. If you enter into a Trust Deed Scotland, it will be binding to all the creditors. This means you will not get calls from the creditors regarding overdue payments. Instead, you will have a single manageable monthly payment to make.
  2. Your monthly payment will be set according to your financial situation. If there is a change in your financial circumstances, the monthly payment will be adjusted to reflect the change. This provision will prevent you from sinking into debt further in case your income reduces during the course of paying back the consolidated debt.
  3. When you enter into a Trust Deed Scotland, your interest rate will be frozen at 0%. Therefore, you will have a lighter debt to pay back than would be the case if you decided to pay without a Trust Deed.
  4. When you finish paying off the debt, you will no longer be indebted to your creditors.
  5. By entering into a Protected Trust Deed, you will be spared from sequestration (the equivalent of a bankruptcy in Scotland). Therefore, your credit score will not be affected.Entering into a Trust Deed allows you to keep your job or look for one. The Deed comes with few restrictions unlike other debt payments options.

Disadvantages of Trust Deeds

Trust Deeds come with a number of disadvantages. Nearly all the cons are related to credit restriction of the debtor. Below are some of the cons of entering into a Trust Deed.

  1. You must adhere to the payment requirements of the Trust Deed for 36 months.
  2. During the duration of your Trust Deed Scotland, you will not be able to obtain credit from lenders.
  3. To make payment and adhere to other provisions of the Trust Deed can lead to sequestration.
  4. Failing to honor the Trust Deed can make you lose your home. You will also lose any equity you will have built up in the home.
  5. A change in your financial circumstances will also warrant a change in your terms of the Trust Deed. Therefore, if your salary or income increases, your monthly payments will be increased.
  6. Depending on the extent of your debt, you may be required to sell off your vehicle and other valuable machinery to recover part of the amount that you owe.
  7. When you enter into a Scottish Trust Deed, it will be advertised in the Edinburgh Gazette and this can put your social reputation at stake.
  8. Your credit history will be affected negatively since the Trust Deed will be recorded in the report. Apart from this, you will not be able to apply for credit for 6 years after the date of entering into a Trust Deed.

Eligibility for a Trust Deed

To be eligible for a Protected Trust Deed, you must be Scotland resident or have been living in the country for the last one year. Residents of Wales and England may not qualify for Scottish Trust Deed but have other insolvency options, including an IVA (Individual Voluntary Arrangement).


Trust Deeds are usually set by IPs (Insolvency Practitioners), who will be your trustees and will carry out the work on your behalf. The IPs will get in touch with our creditors and submit the Trust Deed payments for publication. Part of the money that you will pay will form the payment of the IP. The IP you choose should be a registered member of the Scottish Insolvency Body.