Before you sign a trust deed

Before you sign a trust deed, the insolvency practitioner must warn you about the risks, give you a Debt Advice and Information Package and a trust deed information document, and give you at least 3 calendar days to think. They must also explain all your debt options, not just a trust deed, and the likely costs. Use that time to ask questions, check the insolvency practitioner is licensed, and get free advice if you want a second opinion.

A trust deed is a legal agreement you cannot simply cancel once signed, and it lasts four years or more. The checks on this page help you make sure it is the right choice for you, or spot that it is not.

What must you be given before you sign?

Under the Bankruptcy (Scotland) Act 2016, before you sign, the insolvency practitioner who will be your trustee must advise you that a trust deed may result in:

• your sequestration (Scotland’s form of bankruptcy)
• being refused credit, before or after your discharge
• not being able to stay in your home, unless it is excluded from the trust deed
• having to give up property you own
• having to pay contributions from your income
• damage to your business interests and job prospects
• the fact you have signed a trust deed becoming public

For trust deeds signed from 20 January 2025, they must also give you two documents:

• the Debt Advice and Information Package, an AiB booklet explaining the ways creditors can take action and where to get free money advice
• the trust deed information document, a short summary from the Accountant in Bankruptcy (AiB), the Scottish agency that supervises trust deeds, covering payments, your assets, fees, your credit rating, the public register and what happens if the trust deed fails

You and the insolvency practitioner must both sign a statement confirming these duties have been carried out.

How long do you get to think it over?

The law says you must be given adequate time to consider the advice and documents. AiB’s guidance sets this at at least 3 calendar days, not counting the day you receive the last of the material or the day you sign.

For example, if you receive everything on a Monday, the three days are Tuesday, Wednesday and Thursday, and the earliest you should sign is the Friday. AiB warns that signing before the time is up means the trust deed will not meet the requirements for protection. It also says some people, for example those with more complex vulnerabilities, may need longer.

Three days is a minimum, not a deadline. AiB’s information document says the time is there so you can consider your options and seek further advice if you think it would help.

What must the insolvency practitioner explain?

Insolvency practitioners follow a professional standard called Statement of Insolvency Practice 3.3 (SIP 3.3). It says they should:

• give you information and explanations about all potential debt solutions, not just a trust deed, tailored to your circumstances
• explain the advantages, disadvantages and likely costs of each option, and confirm this in writing no later than when you receive the trust deed to sign
• explain the likely costs of the trust deed and how money from your assets will be applied to them
• explain how long the trust deed is likely to last, how your home could affect that, and what could change it
• explain how likely it is to become protected and what would happen if it did not
• explain what could happen if it is not completed, with an assessment of that risk
• tell you that your home can be excluded from the trust deed, and the risks of doing so
• offer you a meeting, and consider whether meeting in person or by video is needed
• make you aware of your right to complain through the Insolvency Complaints Gateway

If someone referred you, SIP 3.3 also requires the insolvency practitioner to check whether that referrer gave you advice and, if so, whether they were authorised by the Financial Conduct Authority (FCA), and to put right any gaps in that advice. They must also tell your creditors who referred you and the amount of, and reason for, any payment made to the referrer. This site passes details to an insolvency practitioner firm, and how our service works explains who we pass details to and how we are paid.

What questions should you ask?

Take this list with you, and ask for the answers in writing.

Your options

• Which other options have you looked at for me, including the Debt Arrangement Scheme, sequestration and the Minimal Asset Process, and why do they not suit me?
• Could I repay my debts in full over a reasonable time instead?

Costs

• What is your fixed fee, what percentage will you take of the money paid in and assets sold, and what outlays do you expect? (These are the only three things a trustee’s fee can be made up of.)
• How much of my monthly payment goes on fees in the first year?

Payments and length

• How was my payment worked out, and when will it be reviewed?
• What happens if my income drops or I lose my job?
• What could make the trust deed last longer than 48 months?

Your home, car and job

• What happens to my home, and what equity do you think it has?
• Can I keep my car?
• Could this affect my job or any role I hold, such as being a company director?

Debts and risks

• Which of my debts will not be written off?
• How likely is it that my creditors will object?
• What happens if the trust deed fails?

The firm

• Which body licenses you, and what is your name as it appears on the register?
• Who referred me to you, and were they paid?

See what a trust deed costs and trust deed pros and cons for more background.

How do you check an insolvency practitioner is licensed?

Anyone acting as trustee under a trust deed in Scotland must be authorised as an insolvency practitioner by a recognised professional body. The Insolvency Service’s latest annual review lists four: the Institute of Chartered Accountants of Scotland (ICAS), the Insolvency Practitioners Association (IPA), the Institute of Chartered Accountants in England and Wales (ICAEW), and Chartered Accountants Ireland.

1. Ask for the insolvency practitioner’s full name and which body licenses them. The person you speak to may not be the insolvency practitioner, so ask who would be your trustee.
2. Search the Insolvency Service’s register. Find an insolvency practitioner shows licensed insolvency practitioners, their contact details and their authorising body. It only includes those who have agreed to be listed, so it is not a complete list.
3. Check with the licensing body. The IPA has a searchable directory of IPA-licensed insolvency practitioners, although members can opt out of it. If the practitioner says they are licensed by ICAS and you cannot find them, contact ICAS to confirm.
4. Check any other firm involved. If a separate company gave you advice about your debts before passing you on, the FCA says to check its Financial Services Register to make sure the firm is authorised.

What are the warning signs in debt adverts?

Regulators have raised concerns about some adverts for trust deeds and similar solutions. Be wary of:

• write-off percentages, such as a claim that you could write off most of your debt. The FCA warns that some adverts make misleading claims about how much debt you can write off. What your creditors receive, and what is left, depends on your own payments, assets and costs
• ‘government scheme’ claims. A trust deed is a legal process under Scots law, supervised by AiB. It is not a government offer, and the FCA warns about adverts that call solutions government backed
• pressure to sign quickly. The law gives you at least 3 calendar days, and nobody should rush you past that or discourage you from getting other advice
• claims that it is free without saying that fees apply. Trust deeds have fees
• quizzes and speed claims, such as ‘see if you qualify in 60 seconds’. The advertising regulator has said debt adverts should not use these
• anything that looks like a charity or suggests a link to free advice services. The FCA says some operators impersonate debt advice charities
• being coached on your answers, such as being told to understate your income or overstate your spending. The FCA warns about this
• being offered only one option. An insolvency practitioner must explain all your options

You do not have to decide alone. Free, impartial advice is available from Citizens Advice Scotland, MoneyHelper and other services listed in free debt advice in Scotland.

Official sources

• Bankruptcy (Scotland) Act 2016, section 167: advice and information before signing
• AiB Notes for Guidance 2.7: adequate time
• Statement of Insolvency Practice 3.3 (Scotland): trust deeds
• Insolvency Service: annual review of insolvency practitioner regulation 2024
• FCA: unauthorised or unsuitable debt advice