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Protected Trust Deed pros and cons

A trust deed can write off what is left after four years of payments. It also hands your assets to a trustee. Both sides, set out plainly.

Applies to: Scotland

Written by The My Debt Cleared editorial teamLast reviewed 18 October 2026Next review 18 April 2027Jurisdiction ScotlandEditorial policy
A Protected Trust Deed’s main advantages are legal protection from included creditors once it is protected, one affordable contribution, and the remaining included debt being written off after the payment period, normally 48 months. Its main disadvantages are that your assets pass to a trustee, home equity may need to be released, windfalls can be claimed, fees come from your contributions, and it is a public record.

What to do now

  1. Work out your surplus with the budget calculator.
  2. Compare it with DAS and sequestration.
  3. Get free advice from a Scottish money adviser before speaking to a trust deed firm.

The advantages

  • Write-off. At the end of the deed, included debt that has not been repaid is written off on discharge.
  • Legal protection. Once protected, creditors bound by it cannot take recovery action or make you bankrupt over included debts.
  • One affordable contribution, based on your disposable income, distributed by the trustee.
  • A fixed term — contributions normally run for 48 months.
  • Fewer restrictions than sequestration. You do not need to show apparent insolvency, and it does not carry the same legal bars on some roles that bankruptcy does.

The disadvantages

  • Your assets pass to the trustee. Property, savings or a valuable car can be realised. Trust deeds and your home.
  • Windfalls. Money or property you receive during the deed, such as an inheritance or compensation, can be claimed.
  • Fees. The trustee’s fees come from your contributions and assets. Trust deed costs.
  • Public record. It is on the Register of Insolvencies and on your credit file for six years.
  • It may not become protected. If enough creditors object, the deed is not binding on those who do not agree.
  • Failure has consequences. If you do not co-operate or keep up contributions, the trustee can apply for your sequestration.
  • Director and business limits. You may not be able to act as a director or keep running a business unless the deed allows it.

Where it is often a poor fit

  • Debts under £5,000, the minimum for a protected trust deed.
  • Income only from benefits, which cannot be used for contributions.
  • People who could repay in full in a reasonable time — the Debt Arrangement Scheme may be compared, as it protects assets.
  • Very low income and few assets, where the Minimal Asset Process may be looked at.
  • Homeowners with significant equity they cannot release.

Free advice and trust deed firms

Only a licensed insolvency practitioner can act as trustee, and they are paid from the deed. Free money advisers in Scotland cannot set up a trust deed themselves, but they can explain every option, including DAS, which they can arrange at no cost to you. Some firms advertising “government” debt write-offs are lead generators: the government does not run a write-off scheme. Government debt schemes explained.

This page explains how the solution works. It is not a recommendation, and it cannot tell you whether it suits you — a free, regulated debt adviser can look at your full situation.

You can get free, impartial debt advice

You never have to pay for debt advice. MoneyHelper (government-backed), StepChange, National Debtline and Citizens Advice all give free, confidential advice with no obligation.

Common questions

What is the main downside of a trust deed?

Your assets pass to the trustee, so home equity, savings or a valuable car may need to be released, and windfalls during the deed can be claimed.

How long does a Protected Trust Deed last?

Contributions normally run for a minimum of 48 months, after which you can be discharged and the remaining included debt is written off.

Can a free adviser set up a trust deed?

No. A trustee must be a licensed insolvency practitioner, paid from the deed. Free money advisers can explain the options and set up DAS at no cost.

Protected Trust DeedsDAS vs trust deedSequestrationDebt help in ScotlandIVAs and Scotland
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