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The Bankruptcy Service - Trust Deeds

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Like an IVA, a Trust deed is a legally binding voluntary arrangement, whereby a debtor repays their creditors over a specified period of time. There are two types of trust deeds – unprotected and protected deeds.

An Unprotected Trust Deed is an arrangement where assets are transferred to a trustee, who will manage and sell said assets to help pay creditors. Both debtor and trustee are legally bound by the agreement, though the creditors are not permitted to take essential household items.

A Protected Trust Deed prevents all creditors from chasing the debtor for monies owed. To obtain one, a debtor must contact all creditors stating that they wish to have a protected trust deed, and then state this intention by placing an advert in the Edinburgh Gazette.

Creditors then have five weeks to object in writing to the request. If no objections are received the trust deed can proceed as protected.

There is no minimum amount of debt required for a trust deed, but you must use the services of a registered insolvency practitioner to act as the trustee. The terms can be as the debtor sees fit (and is confident will be accepted). The deed stops creditors chasing you for money and avoids some of the unfavourable consequences of sequestration, though failure to comply with the terms or a lack of co-operation could lead to a sequestration request from creditors.

At the end of the deed, any remaining debt is written off. The period of the deed is usually between 3 and 5 years. If a trust deed is objected to by creditors then the individual can push for sequestration (the debtor must owe at least £1500).

Free debt counselling and advice is also available from the Money Advice Service available at: doesn't charge a fee for its bankruptcy service, but receives remuneration from the partners that we work with in order to keep operating. Those partners must charge a fee to the customer to likewise cover operational costs, and this amount will vary depending on the solution offered, and the terms of the parner. For details of these terms, please refer to the website of the organisation dealing with your bankruptcy. Upon application with, we will forward your information on to one of our specialist debt partners. You will then be contacted, and you will be able to explain your case, and expert advice will be offered in order to ascertain the most appropriate debt solution.