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Protected Trust Deeds

Trust deeds explained – what is a protected trust deed?

Struggling with unsecured debt can be really stressful, and place a huge strain on you, your health and well-being, and your family relationships, it can also affect your work.

The good news is that it does not have to be this way, and that we at TC Debt Solutions can help you find a better way forward.

If you are struggling with unsecured debt of £5,000 or more, and you live in Scotland, you have the option of entering into a Protected Trust Deed to help you clear your debts while making life much easier for you and those close to you.

A Protected Trust Deed is a form of insolvency and while that word might sound intimidating, a Protected Trust Deed is simply a formal agreement between you and your creditors.

How does a Protected Trust Deed work

Leaving you free to get on with your life

How does a protected trust deed work?

Entering into a Protected Trust Deed takes the strain and stress away from having to deal with your debt.

It is dealt with and run by a licensed insolvency practitioner.  This person is known as your Trustee, and they deal with all your creditors on your behalf.

This is what we at TC Debt Solutions can do for you, allowing you to get on with your life and work towards hopefully, a brighter and more prosperous future.

We will communicate with creditors to seek their agreement which is required for a Protected Trust Deed to go ahead.

Your Debt Written off

A formal agreement

The Trust Deed is a formal agreement between you and your creditors to pay back an affordable amount over a period of time – this is usually a period of 4 years. 

When you sign a Trust Deed, you agree to make one affordable payment each month to your Trustee for the duration of the Trust Deed. At the end of the period of the Trust Deed, any remaining debt is simply written off,  leaving you free to get on with your life.

Scotland Is Different

Is a Trust Deed an IVA?


Where you live in the United Kingdom determines the debt solutions that are available to you. There are different debt solutions for the various parts of the United Kingdom: this is based on separate legal systems and legislation.

An Individual Voluntary Arrangement or IVA applies to England, Wales and Northern Ireland, but people in Scotland cannot enter an IVA.  In Scotland, there is a similar Scottish debt solution called a Protected Trust Deed.

There are other key differences between a Protected Trust Deed and an IVA (apart from where someone lives and the legal system in that part of the UK).


  • A Protected Trust Deed is typically a 4 year debt solution; an IVA lasts for 5 years
  • You can enter a joint IVA (as husband and wife), but the Scottish Trust Deed does not allow for this and requires two separate Trust Deeds (or one Trust Deed and another debt solution)
  • You can enter a Protected Trust Deed in Scotland with £5,000 or more of unsecured debt; to enter an IVA, the threshold is £7,000 of unsecured debt
Right from day one, you kept me informed of everything and any question I had, of which they were many, was answered promptly with the indication that it was no trouble at all to provide an answer.

We will advise and help you at every stage

How can TC Debt Solutions help me with a Protected Trust Deed?

Deciding if a Protected Trust Deed is right for you will depend on your financial and personal situation. Often there are a number of suitable solutions and it's our responsibility to ensure you have all of the relevant information so you can make an informed decision about the debt solution you wish to enter.

There are pros and cons to all debt solutions and it's essential you are aware of these.

What are the advantages of a Protected Trust Deed

What are the advantages of a Protected Trust Deed?

  • You pay back only what you can afford, and in one monthly payment for the period of the Trust Deed
  • You do not have to deal with your creditors: your Trustee will do all of that for you and negotiate with them on your behalf
  • You can agree beforehand with your Trustee whether assets you own (e.g. properties) are affected by your Trust Deed
  • You will be free from the risk of any creditor deciding to take court action against you
  • You may be able to remain a director of a limited company
  • Any remaining debt at the end of the period of your Trust Deed will be written off


Creating breathing space

In times of distress, a moratorium provides some breathing space to stop creditors taking further action against you for debt you are owe them, giving you time to think, take advice and decide on the best course of action.

If you are having difficulty repaying one of more of your creditors and require more time to consider your options, you can apply for a moratorium on creditor diligence.

It is used alongside the statutory Scottish debt solutions and may be available if you are considering applying for Sequestration, a Trust deed or for the Debt Arrangement Scheme.

A moratorium effectively stops creditor action against you for six months, offering valuable time to seek advice and think about your options. You are allowed to apply for one six-month moratorium in any twelve-month period. 

We are here to help

Common questions on Protected Trust Deeds

Are there any protected trust deed disadvantages?

In order to safeguard your assets, you need to transfer all your assets to your Trustee for the Trust Deed to have protected status.

We can advise you in all of this and of all the categories of asset that need to/do not need to go into your Trust Deed.

Does a Trust Deed affect credit rating?

A Trust Deed may make it more difficult for you to get credit for a while once your Trust Deed has been finalised.

We can discuss all the implications and all the options with you.

How long does a Trust Deed stay on your file?

This is a question that we are, quite understandably, often asked.

The simple answer is that the information will stay on your credit file for 6 years after you sign a Protected Trust Deed.

Plan for the future

What happens at the end of a Protected Trust Deed?

Reaching the end of your Protected Trust Deed is a momentous occasion.

It’s a time to pat yourself on the back, knowing that you are free from the worry of debt.  It’s a time to make plans for the future – plans that are now based on financial certainty.

By making all your payments under your Protected Trust Deed, you have fulfilled all requirements and none of the creditors contained in your Protected Trust Deed can ask you to pay any remaining balance on monies that are still owed.

These amounts are simply written off at the end of the 4 year period. 

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Find out how a Protected Trust Deed could bring about a better future for you and your family, complete our short form and we will contact you.

Don't delay, start clearing your debts today.

The future looks bright

What should you do after your Protected Trust Deed has finished?

Circumstances change, and you never know when you might require credit in the future, so it’s best to start planning for it now.

Step 1

Finishing your Protected Trust Deed is a chance to start afresh and build on your success. 

One of the first things to do is to check that your credit file has been updated to reflect the fact that you have met all your obligations under the Protected Trust Deed. 

Step 2

Creditors who were included in the Trust Deed will have registered a default on your credit file. 

You should check that any default has been registered no later than the start of the Trust Deed itself; registering a default after that date is not permitted.

Step 3

You should also check that all creditors contained in your Trust Deed have marked the debts as having been settled in full.  They should do this as a matter of course, but if they have not done this after a period of 3 months from your final payment, then you should write to them individually to ask them to amend your credit file.

Step 4

While the last thing that you will be thinking of is taking out more credit, it is still a good idea to start thinking about rebuilding your credit rating.

This is needed for everything from getting the best mobile phone contract, right through to buying a new car or even getting another mortgage.

Step 5

Other key things include:

  • Continuing to meet any repayments relating to financial obligations that you may have (which were not included in the Trust Deed)
  • Staying within agreed overdraft limits on any current account(s)
  • Remaining in credit (if possible) in your current account(s)

Step 6

In time, you might want to consider applying for a credit card that you pay off in full each month, and without paying any interest at all. 

You could use this for small items of expenditure – again with the proviso that you always pay off the amount in full each month. 

Step 7

In sound financial management terms, it’s also a good idea to build up a contingency fund.

This will allow you to meet any unexpected expenses that you might incur.

Such as repairs to the car, or central heating system for example.


The contingency fund is a great way of demonstrating financial responsibility and acumen to potential creditors and lenders – thereby improving your credit rating.

One thing’s for sure though – the future may be brighter again at the end of a Protected Trust Deed.

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