Can you take a payment break in a trust deed?

There is no legal right to a payment break in a protected trust deed. Unlike the Debt Arrangement Scheme (DAS), where the rules allow a payment break of up to 6 months if your disposable income falls by 50% or more, the law on trust deeds does not set out a payment holiday. What it does allow is for your contribution to be changed, and your payment period extended, by agreement with your trustee, and mygov.scot says a trustee may agree to a payment break if your income goes down.

Your trustee is the licensed insolvency practitioner who runs your trust deed. The Accountant in Bankruptcy (AiB) is the Scottish agency that supervises trust deeds. Free, impartial advice is available from the services in free debt advice in Scotland.

Is there a payment break in a trust deed?

Not as a set rule. We checked section 168 of the Bankruptcy (Scotland) Act 2016, which governs trust deed payments, and AiB’s Notes for Guidance for trustees (last updated 8 July 2026). Neither mentions a payment break or payment holiday.

mygov.scot’s trust deed guidance says that if your income goes down, your trustee may agree to reduce your payment amount or give you a payment break. So a break is possible, but:

• it is not a right: your trustee decides
• there is no set length and no qualifying test in law
• it must be agreed before you stop paying, not afterwards

How can your payments change instead?

The law and AiB’s guidance give your trustee several ways to respond when your circumstances change. A change to how much you pay, or for how long, is often called a variation.

A lower payment

AiB’s guidance says contributions can be varied up and down if your circumstances change. Your contribution is the whole of your surplus income, worked out using the Common Financial Tool, the set method used across Scotland to work out what someone can afford. If a new budget shows your surplus has fallen, your contribution is worked out again on that budget. Ask your trustee to show you the figures. No contribution can be taken from Universal Credit or other benefits.

A longer payment period

Section 168 of the Act allows the payment period to be longer than 48 months in two situations:

• where there has been a period when you did not pay your contributions, the trustee can set a longer period
• you and your trustee can agree a longer period

So a pause, or a spell of lower payments, may mean the trust deed runs for longer. Ask your trustee how long any extension would be before you agree.

What a longer trust deed can mean

• Your entry on the Register of Insolvencies, the public record anyone can search for free, is removed 12 months after the trust deed ends, so a later end means a later removal.
• Your credit rating is affected for 6 years from the date the trust deed began. If your trust deed runs longer, check your credit report to see how it is shown.
• Windfalls: the period during which money you receive, such as an inheritance, goes to the trust deed is 4 years from the date you signed. That does not move.

How do you ask for a break or a lower payment?

Contact your trustee as soon as you know there is a problem, and before a payment is due if you can. AiB’s guidance says you must contact your trustee straight away if you cannot pay a contribution.

mygov.scot says your trustee will ask you to fill in another income and expenditure form and show evidence of the change. That could be payslips, a fit note or a benefit award letter. When you speak to them, ask:

• Is this a pause, or a lower payment?
• How long will it last, and when will it be reviewed?
• Will the trust deed be extended, and by how long?
• What happens if my income has not recovered by the end of it?
• Could this affect my discharge?

Get the answers, and any agreement, in writing.

What if your trustee says no?

Ask for the reasons in writing, and check your new budget was worked out properly. You have some routes if you think a decision is wrong:

• AiB directions. The Act lets AiB give a trustee directions about how the trust deed is run, and it can do so at the request of the debtor, at AiB’s discretion.
• Complaints. Your trustee’s professional rules require them to make you aware of your right to complain through the Insolvency Complaints Gateway.
• Free advice. A money adviser can check your budget and help you put your case.

AiB’s guidance also says it would not be appropriate to refuse your discharge because of circumstances beyond your control, such as a change that stops you paying your contribution. That protection depends on you keeping your trustee informed.

What if a break would not be enough?

If a change outside your control, such as a serious illness, means you can no longer keep to the trust deed and there is no reasonable prospect of that changing, your trustee can seek your early discharge for extenuating circumstances. AiB says a period of unemployment on its own would not normally be enough. See if your circumstances change and how long a trust deed lasts.

If you are still deciding whether to enter a trust deed, and you think your income may be unsteady, it is worth knowing that DAS has set payment break rules, that sequestration usually ends in discharge after 12 months, and that the Minimal Asset Process has no application fee. A trust deed also has fees, affects your credit rating for 6 years, puts your name on a public register, may mean releasing equity in your home and cannot include every debt. An adviser needs to look at your full situation before any option is chosen.

Official sources

• Bankruptcy (Scotland) Act 2016, section 168: the payment period
• AiB Notes for Guidance 6.1: contributions
• mygov.scot: if your circumstances change during the trust deed
• mygov.scot: DAS change of circumstances and payment breaks
• Bankruptcy (Scotland) Act 2016, section 179: AiB directions to trustees