Check If You Qualify

Can you pay off a trust deed early?

Sharon McDougall - Updated - 29th April 2024 - 2 minutes to read

How to make early repayments towards your trust deed?

A trust deed is a formal debt solution for people in Scotland who are in unmanageable debt. It helps them to escape the relentless creditor pressure that can be experienced in this situation, and allows for a fresh start with a financial ‘clean slate.’

The trust deed arrangement is made official following formal negotiations with creditors, and any debts remaining at the end of the procedure are written off. It you enter into a trust deed, it also legally binds you and your creditors.

Creditors aren’t allowed to contact you or add charges/interest to their debt, but it also means that you must make the agreed payments in full and on time for the duration of the arrangement.

Scotland Debt Calculator

Get a rough indication of what your repayments might be under each of our different debt solutions.

Your Total Debt

£0 - £5,000

£5,000 - £10,000

£10,000 - £20,000

£20,000+

Your Employment Status

I am employed

I am self-employed

I am unemployed

I am a student

I am retired

Your Total Monthly Income

£0 - £1,000

£1,000 - £2,000

£2,000 - £3,000

£3,000+

What can you pay monthly towards your debt?

£0 - £100

£100 - £200

£200 - £300

£300+

How long does a trust deed usually last?

A typical trust deed lasts for four years, but can continue for a further year in certain instances. So is it possible to pay off your trust deed early in some circumstances, and what do you need to consider if this is an option?

There may be situations where paying off a trust deed early is possible, but the first issue to consider is what the full repayment would comprise:

  • The total debt
  • Interest and costs of the process
  • The trustee’s fees

When could you repay a trust deed early?

You sell your home

A significant benefit of entering into a trust deed is that, unlike sequestration, your home isn’t typically at risk. Instead, if there’s sufficient equity in the property to make it worthwhile, the trustee may ask that you remortgage to release funds for your creditors. Depending on your circumstances, you might decide to sell your home if you can pay off the trust deed early with the proceeds.

You receive an inheritance or windfall

If you receive a lump sum payment, perhaps an inheritance or windfall such as a lottery win, you must tell the trustee straight away. This is part of your obligation when entering a trust deed as it may allow you to pay off all your creditors in full, plus the interest and cost elements of the process.

You’ve received a redundancy payment

In the case of a redundancy payout, the trustee is likely to look at your employment situation as a whole. For example, whether you’ve already secured another job, or if you’re relying on your redundancy pay to meet essential outgoings until you find work.

In the case of any lump sum payment that you receive during your trust deed term, however, you need to provide proof of where the money has come from and allow the trustee to make their decision on the best way forward.

What happens when a trust deed ends?

When a trust deed ends, your trustee will inform your creditors who should notify the credit reference agencies that it’s been successfully completed. It’s worthwhile checking up on this as it allows you to start rebuilding your credit file.

The trustee will also issue a discharge certificate to confirm that the trust deed has finished, whether that’s earlier than anticipated or it’s run the full term. Additionally, the trust deed should be removed from the public record – the Register of Insolvencies – by the Accountant in Bankruptcy (AiB).

For more information on trust deeds, please get in touch with our expert team at Scotland Debt Solutions. We’ve been helping Scottish residents to escape debt since 1989, and can provide the independent advice you need. We offer free, same‐day meetings, and operate a network of offices around Scotland.

facebook colour icon linkedin colour icon messenger colour icon whatsapp colour icon email colour icon
Sharon McDougall Square

Sharon McDougall

Manager

Other Articles

What to do if you are in debt to Clearpay Stressed woman looking at debt bill

What to do if you are in debt to Clearpay

Clearpay lets you spread the cost of your purchase through 4 instalments, due every 2 weeks. The payment option is available online, through the Clearpay app, and you can also use a digital payment ca...

What to do if you are in debt to PayPal Man holding a credit card

What to do if you are in debt to PayPal

Buy now, pay later (BNPL) services are gaining popularity due to their easy access and flexible repayment options. BNPL is highly appealing as it lets you spread the cost of a purchase, rather than ma...

9 practical tips for cutting your household expenses Household Expenses

9 practical tips for cutting your household expenses

We all want to save on our household bills and have more money in our pocket for the fun things in life. While bills are an unavoidable fact of life, here are some ways you can help to reduce them:

About

Why Choose Us

Usp Discussion

Speak Direct With

A Qualified Adviser

Headset

We Don't Operate

Call Centres

Usp Location

5 Offices in Scotland

National Coverage

Usp House

Ask us About

Home Visits

Usp Award

Fully Regulated Advisors

From a Reputable Firm

Usp Hand Heart

Helping Scots Get

Out of Debt Since 1989

We'll give you a call

Our Scottish based team can help advise you on your debt problems.

Here at Scotland Debt Solutions we take your privacy seriously and will only use your personal information to contact you with regards to your enquiry. We will not use your information for marketing purposes. See our Privacy Policy.

Tools

Useful Tools

Personalised Debt Report
Usp Planner

Personalised Debt Report

Our personalised debt report will help you better understand your financial position and see where your money is going.

Debt Report
Instant Scheduled Call & WhatsApp
Headset

Instant Scheduled Call & WhatsApp

Arrange a call with an expert advisor at a time to suit you or contact our team via WhatsApp for immediate help and advice.

Arrange Callback
Find a Local Office
Usp Signpost

Find a Local Office

We have five offices located across Scotland. Find your nearest one here.

Find an Office

OUR SERVICES

We can help you with...

Sequestration

Sequestration

Sequestration is the Scottish version of bankruptcy and may be suitable for you if you do not have the money to pay back your debts

Find out More
Trust Deeds in Scotland

Trust Deeds in Scotland

A Trust Deed involves making a monthly contribution to your debts for up to four years. After this time any remaining debt included in the Trust Deed will not need to be paid.

Find out More
Debt Arrangement Scheme (DAS)

Debt Arrangement Scheme (DAS)

A Debt Arrangement Scheme (DAS) lets you pay off your debt through a series of manageable instalments over a reasonable length of time.

Find out More
Business Debts
Icon Briefcase

Business Debts

Whether you are a sole trader or a limited company director, we can help you work through your current financial problems including money owed to HMRC

Business Debts

Our Insolvency Practitioners are regulated by ICAS or the IPA and our firm is authorised and regulated by the Financial Conduct Authority

Fees and Information: There are fees associated with our services. These will be fully explained before entering into any of the personal debt solutions referred to on this website. Full details of our fees and how these are charged are fully explained to you prior to you committing to any particular service.

ICAS Insolvency Practitioners