Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Protected trust deed definition

What does Protected trust deed mean? A protected trust deed is a Scottish personal insolvency arrangement in which an individual grants a trust deed to an insolvency practitioner (the trustee), assigning disposable income and, where appropriate, non‑essential assets for distribution to unsecured creditors over a fixed period (typically around four years). It is a statutory process under the Bankruptcy (Scotland) Act 2016 and the Protected Trust Deeds (Scotland) Regulations 2013 (as amended). The deed becomes “protected” if creditor objections do not meet the statutory threshold within the notification period, after which it binds all included creditors. Once protected, creditors are prevented from enforcing debts covered by the...

Scotland: Protected Trust Deeds: legal framework, eligibility, protection process, AiB oversight, creditor challenges, debtor’s home, discharge, and 2024 regulatory reforms

Published by a LexisNexis Restructuring & Insolvency expert

Practice notes

For many years, debtors have relied upon trust deeds in order to reach a compromise with their creditors as an alternative to formal Sequestration in Scotland (see Practice Note: Scotland: the process for applying for sequestration).

Rooted in the common law, trust deeds long attracted a relatively ‘light touch’ from the courts, but the law now pays closer attention to them and to this field generally today.

Accordingly, trust deeds are presently subject to markedly tighter regulation than previously in Scotland.

This Practice Note outlines the key legal principles on trust deeds and the process for obtaining, and the effect of, protected status in this context too.

For definitions of frequently used Scottish Insolvency terminology, see Practice Note: Glossary of Scottish insolvency words and expressions therein.

The Scottish government has announced a commitment to review both formal debt recovery mechanisms—diligence—and the statutory debt solutions—moratorium protection, bankruptcy, Protected Trust Deeds and the Debt Arrangement Scheme—with the aim of ‘further enhancing and improving our system’ in due course.

Consultation took place from 12 August 2022 to 7 October 2022 (see: LNB News 12/08/2022 28).

The nature of a trust deed

A trust deed constitutes a consensual arrangement between a debtor and their...

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James Lloyd

Harper Macleod LLP

James heads the firm's Insolvency team and has advised on corporate and personal insolvency related matters for a number of years. He advises creditors, banks and insolvency practitioners on all aspects of insolvency litigation. Chambers UK Guide to the Legal Profession lists James as a "Leader in the Field" in both Restructuring/Insolvency and Personal Insolvency, where he is noted for having a strong reputation in the market, his clients appreciate his ability to "do an extremely good job under difficult circumstances." Sources note "He's good. He tells you as it is." James has been recognised as a "World Leader" in commercial litigation by Who's Who Legal. James is a member of the team that won the prestigious "Insolvency Team of the Year" award at the Law Awards of Scotland 2012....

Elisabeth Roxburgh

Axiom Advocates

Elisabeth called to the bar in 2012. She practices mainly in commercial law and appears regularly in the commercial courts. She specialises in insolvency and company law matters and is regularly instructed in cases involving all aspects of bankruptcy and insolvency. She is ranked as Band 1 in restructuring and insolvency by Chambers and Partners. She is also ranked in restructuring and insolvency by Who’s Who Legal and for commercial litigation by the Legal 500.Elisabeth was appointed as a standing junior to the Advocate General for Scotland and in that role has undertaken work for, amongst others, HMRC and the Insolvency Service.Prior to becoming an advocate, Elisabeth was a solicitor in the restructuring and insolvency team within the litigation department at Shepherd and Wedderburn LLP. During that time, she obtained experience in both contentious and non-contentious insolvency matters. In 2008, she obtained the...

Web page updated on 21/05/2026

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