How long does a Trust Deed last in Scotland?

By: Scottish Debt Expert0 comments

In hindsight, Richard will be the first to tell you that his constant overspending and poor money management has been the crux of his financial downfall.

After buying a new Jaguar XE to match his new 5-bedroom house, Richard soon realised he had bitten off more than he could chew. 

After a couple of accidents in the Jaguar, Richard saw his car insurance sky-rocket. A messy divorce with his wife followed, and all of a sudden, he was left with a mountain of bills, maxed out credit cards and a hefty mortgage to pay all by himself. Oh, and don’t forget the pricey council tax!

Richard’s lack of budgeting meant he was losing track of his expenses. Slowly but surely, he was slipping into serious debt problems. 

After consulting a debt advice service, Richard was advised on a number of debt solutions available to him in Scotland that could support his financial situation.

As a result of having unsecured debts of over £5,000, a steady income, and valuable assets like his house and car, Richard was informed of his eligibility for a Protected Trust Deed scheme.



The Length of a Trust Deed in Scotland

The duration for a trust deed is usually 4 years (48 months). We say ‘usually’ because there area number of factors that have the influence to alter this length of time.

Four years is the minimum length of time for a Trust Deed if you have no assets that can be used to repay your creditors. Your trust deed will last 4 years if you haven’t missed a single payment and have cooperated with your trustee throughout the process.

On the other hand, if you know you’re going to struggle to keep up with your payment obligations throughout the 48 month period, it may be an option to arrange a longer period of time to complete the trust deed. 

You’ll also be given the opportunity to extend the period of your trust deed if you have agreed to make additional monthly repayments instead of using the equity released from a property.

If the length of your trust deed is going to be anything other than 48 months, this must be formally agreed prior to you entering into the trust deed. During the agreed period of time, you will make regular monthly payments to creditors in order to pay back your debts in full.




What happens at the end of a Protected Trust Deed?

First things first – trust deeds can either be ‘protected’ or ‘unprotected’. 

A protected trust deed is a legally-binding agreement by all parties that prevents any further action being taken against you as long as you adhere to the arrangements of the trust deed. 

On the contrary, an unprotected trust deed is agreed without the consideration of your creditors and leaves you unprotected from further legal action. It’s definitely in your best interest to enter into protected trust deed as it offers you a greater deal of protection and security over time.

Once you have completed your protected trust deed, any remaining debts you owe will be written off if you have complied with all the obligations that were agreed at the beginning of the process.

If you tick all the boxes, you will be discharged from your debts and the worry of dealing with creditors will be a thing of the past. 

The ‘discharge’ process takes around a month, so if you’ve not heard anything past this time, we recommend you get in touch with your licensed insolvency practitioner to chase it up. It’s in your best interest, as once discharged, you are officially debt free.

Furthermore, all your details will be removed from the Scottish trust deed register within three months, as well as receiving a certificate from your trustee to acknowledge your compliance and completion of the scheme. 




What happens to my home if I am in a protected trust deed?

If you are a homeowner, it is your trustee’s responsibility to assess the total value of your assets for the benefit of your creditors. In most cases, your most valuable assets are likely to be your home or your car.

Unless your home has been exempt from your trust deed agreement, your property will probably be passed onto the trustee in order to release equity, with the resulting money being paid to creditors.   

If your trust deed has been acknowledged as being ‘protected’, it may be possible to exclude your home from your trust deed. However, realistically, you’ll only be able to exclude your property if you have minimal or negative equity.

If you’re the owner of a mortgaged property, you can calculate your home’s equity by taking the value of your property and subtracting the total amount needed to repay the mortgage. This will help you see whether there’s any financial benefit to using your property as part of the settlement. 




How long does a Trust Deed affect your Credit File?

Once you have been discharged from your trust deed, you can start taking steps to rebuild your credit. 

Your debt-free status should reflect on your credit score within three months. If you’ve found that your debts have not been updated within three months, get in touch with your creditors to ask them to update your credit file.  

Unfortunately, you’re going to be more susceptible to higher interest rates and you may find it difficult to obtain credit for the next 1-2 years after ending your trust deed arrangements. 

A trust deed remains on your credit file for six years after the start of your agreement. So, if your trust deed has lasted the typical 4 years, you’re still going to have 2 years worth of poor credit before it will no longer show on your credit file and you can start rebuilding your credit rating.

After the completion of your trust deed, your creditors are obliged to inform the credit reference agencies that their debt has been ‘settled’ or ‘satisfied’ so you can start getting the ball rolling to build your credit back up. 




Alternative Debt Solutions

Protected trust deeds are not the only available option to sort out your debt problems. At Scottish Debt Expert, we have a number of friendly debt advice professionals that can help you work out the best solutions to your debt. 

Alternative options include filing for Sequestration (Bankruptcy), or entering into a government-run Debt Arrangement Scheme (DAS).

It’s important to reiterate that trust deeds are only available to people living in Scotland. If you live in England or Wales, an Individual Voluntary Arrangement (IVA) or Debt Management Plan (DMP) will better suit your needs.




Contact Us

If you are looking for further guidance related to trust deeds in Scotland, or any sort of debt advice, please don’t hesitate to contact us.

At Scottish Debt Expert we offer help and guidance to anybody struggling with debt. Our Glasgow-based staff are always on-hand to chat through any concerns or questions you may have.

We’re available by telephone, email or face to face and will always arrange a call back within 24 hours. Email us at or call us at 0141 483 7477 between 9am-5pm Monday to Friday.

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