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A Protected Trust Deed is a formal debt solution available only in Scotland. It allows you to make one affordable monthly payment towards your unsecured debts for a fixed period (usually 4 years). At the end of the term, any remaining included debts are written off, giving you a fresh financial start.

At RMS Financial, we offer clear, no-obligation advice to help you understand if a Protected Trust Deed is the right option for your situation—or if a less formal solution like a Debt Management Plan or a more formal one like Sequestration might be better. We support you every step of the way.
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What is a Protected Trust Deed?

A Protected Trust Deed is a legally binding agreement between you, a licensed Insolvency Practitioner (who acts as your Trustee), and your creditors. You transfer control of your non-essential assets to the Trustee, and you make regular affordable monthly contributions from your income. Once protected (approved by the majority of creditors), all creditors are bound by the agreement and must stop chasing you.
This Scotland-specific solution provides legal protection from creditor action, freezes interest and charges on included debts, and offers a clear path to becoming debt-free after the fixed term.
We’ve helped over a thousand people deal with their debt.

We’ve helped over Thousand people deal with their debt

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How does a Protected Trust Deed work?

Setting up a Protected Trust Deed usually follows these key steps:
  • Professional debt advice: We review your full financial situation, income, expenses, assets, and debts using the Common Financial Tool to determine affordability and suitability.
  • Proposal preparation: A licensed Insolvency Practitioner prepares the Trust Deed proposal, including your affordable monthly payment (typically for 48 months) and any asset contributions.
  • Creditor approval: The proposal is sent to your creditors. If the majority (in value) do not object within the protection period (usually 5 weeks), the Trust Deed becomes “Protected” and is registered with the Accountant in Bankruptcy (AiB).
  • Monthly payments: You make one affordable payment to the Trustee each month. The Trustee distributes funds fairly to your creditors.
  • Debt write-off: After the agreed term (usually 4 years), any remaining included unsecured debts are written off.
  • Ongoing support: We guide you throughout and help with adjustments if your circumstances change.
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Is a Protected Trust Deed suitable for me?

A Protected Trust Deed may be a good option if you:
  • Live in Scotland and have unsecured debts of at least £5,000 that you cannot repay in full
  • Have a regular income and can afford consistent monthly contributions
  • Want legal protection from creditors while avoiding the higher asset risk of sequestration
  • Prefer a fixed-term solution with the possibility of partial debt write-off
It is particularly suitable for people with steady income who want to keep their home and essential assets where possible. We always provide honest advice and explain every available option so you can make an informed choice.
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What debts can be included in a Protected Trust Deed?

Most unsecured, non-priority debts can usually be included, such as:
  • Credit cards and store cards
  • Personal loans
  • Payday loans and short-term loans
  • Overdrafts
  • Catalogue debts

What debts cannot usually be included?

Certain debts are not written off and must still be paid, including:
  • Mortgage or secured loan arrears (though the process may help manage payments)
  • Council tax arrears
  • Income tax, VAT, or other HMRC debts (in some cases)
  • Child maintenance payments
  • Court fines and certain student loans
  • Debts incurred through fraud
We can help you prioritise these debts and manage them alongside your Protected Trust Deed.

Advantages and disadvantages of a Protected Trust Deed

Advantages
  • Legal protection from creditor harassment and legal action once protected
  • Interest and charges on included debts are usually frozen
  • Fixed term (usually 4 years) with potential partial debt write-off at the end
  • You make one affordable monthly payment instead of multiple bills
  • Often allows you to keep your home and essential assets (subject to Trustee assessment)
Disadvantages
  • Formal insolvency solution — it appears on your credit file for 6 years
  • You must make consistent monthly payments for the full term
  • Non-essential assets may be realised by the Trustee to benefit creditors
  • Some restrictions during the term (e.g., on new credit or certain jobs)
  • Requires creditor approval to become protected

Will a Protected Trust Deed affect my credit file?

Yes. A Protected Trust Deed is recorded on your credit report and typically remains for 6 years from the date it is granted. This can make obtaining new credit, loans, or mortgages more difficult during and shortly after the process. However, once the debts are cleared at the end of the term, many people see their financial situation improve as they rebuild responsibly.

How long does a Protected Trust Deed last?

  • Payment term: Usually 48 months (4 years) of affordable monthly contributions.
  • Debt write-off: Any remaining included unsecured debts are written off at the end of the term (provided you have kept to the agreement).
  • The process provides a structured, time-limited path to debt freedom compared to longer informal plans like a DMP.
If your income changes, the Trustee can review and adjust contributions accordingly.

Alternatives to a Protected Trust Deed

A Protected Trust Deed is a serious step. Before proceeding, consider these alternatives:
  • Debt Management Plan (DMP) — Informal, flexible repayment with reduced payments (no debt write-off)
  • Debt Arrangement Scheme (DAS) — Statutory repayment plan for Scotland residents
  • Sequestration — Scottish bankruptcy with faster discharge but higher asset risk
  • Individual Voluntary Arrangement (IVA) — Similar formal solution available in England, Wales & Northern Ireland
We will compare all options with you and recommend the one that best fits your needs without pushing you into any solution.
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