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A Trust Deed is a legal process that is available to residents of Scotland and must have lived in Scotland for at the least 6 months prior to the application. You must be in full time employment for at least six months before applying for a Trust Deed. Finally you must not be over 62 years, however each case will be considered on its own merit.

The Insolvency Practitioner will ask you to provide details of all of your outstanding debts. The payments are worked out by taking all of your monthly essential bills and subtracting it from your monthly income. The amount left is your disposable income which will be distributed to your creditors on monthly basis. Your monthly disposable income, any assets, savings or investments you have will also be taken into consideration when creating an offer for your creditors.

You also need to prove that you will be able to keep up your payments and your creditors will need to see that you are capable of maintaining the payment for the duration of the arrangement. If you are not able to convince your creditors, they may decide to file for bankruptcy (sequestration).

Once two thirds of your creditors agree the proposed arrangement your Trust Deed will become Protected. Protected status means that all the creditors will accept the balance of the trust deed as full and final settlement at the end of the arrangement. It also means that any further interest charges will be frozen and the creditors cannot take any further action against you unless you fail to keep to your monthly payments.

A Trust Deed is a legal arrangement through the courts and will last for a specified period, usually three years (36 months). When the term of the arrangement comes to an end, any remaining debts are written off.

During the Trust Deed arrangement you must agree to fulfil the following:
• Must pay the agreed monthly amount on regular basis within the due date.
• No further credit must be obtained.
• Informing your Trustee of any unexpected windfalls of over £200
• Must keep your Trustee up to date with any changes such a change of address, change in your 
  financial circumstances or changes in your family situation etc.
• Co-operate with the Trustee at all times.
and the advantages are:
• All your correspondence from creditors are dealt with by the Trustee
• Information on a Trust Deed is not published, unlike a sequestration.
• All interest and charges are stopped.
• You will often be able to remain self employed, director of a company or in public office.