How Much Will I Pay On A 40k Trust Deed?

Scottish MoneyWhat is a Trust Deed?

A trust deed is a voluntary but formal agreement that an individual can enter into with their creditors, the people they owe money to, in order to pay off as much of their debt as they can comfortably afford with their monthly disposable income. This is done through an insolvency practitioner, also known as a trustee, and is legally binding. Trust deeds normally last form 3-5 years and at the end of the trust deed agreement all remaining debt is legally written off.

Is a Trust Deed right for me?


  • Trust deeds are most suitable for people who have large amounts of debt and have become unable to manage the repayments they are expected to make each month.
  • Trust deeds proposals vary from one person to the next based on each person’s individual financial circumstances.
  • How does it become a Protected Trust Deed?


Your trust deed will become protected provided that a maximum of half of your creditors, or any creditors who are owed a third of the total debt, do not object to the trust deed proposal. Once your trust deed becomes protected your creditors can no longer chase you for the debt you owe them nor can they increase the amount you owe them, through interest or fees etc.

Do I qualify for a trust deed?


  • Trust deeds are not restricted to a set amount of debt or level of contribution.
  • Trust deeds are restricted to individuals living in Scotland.
  • Only unsecured debts can be included in a trust deed, these are debts that an individual has not secured against their assets, such as a person’s property.


So how much would I pay on a 40k trust deed?

Based on a household monthly income of £1600 and total monthly expenditure of £800, entering a trust deed for a total debt amount of £40,000 would work out as follows:


  • Total debt – £40k
  • Monthly repayments x36 – £267
  • Total debt repaid £9,612


This example is based on a particular set of circumstances and although your situation may be similar to the one above, each trust deed proposal is reviewed on an individual basis taking into consideration your personal circumstances. The amount you will have to repay each month will differ from one trust deed to the next and is calculated based on how much you can comfortably afford to pay each month- not how much debt you have. At the end of the trust deed, all remaining debt is legally written off so you cannot be chased by creditors for any remaining debt.



Leave a Reply

Your email address will not be published. Required fields are marked *