IVAs & Trust Deeds

Trust Deeds

What’s the difference?

Trust Deeds and IVAs are both popular – and fairly similar – debt solutions, mainly due to the fact they both usually write off a considerable proportion of a customer’s debts.

You might have heard of a Trust Deed being referred to as ‘the Scottish IVA’. For customers looking at what debt solutions are available to them, this can be rather confusing – especially when you’re told the two terms are actually different.

This guide looks to clarify what a Trust Deed is, and how it differs to an Individual Voluntary Arrangement (IVA).

The Scottish IVA

Firstly, it is important to note that IVAs are only available for people who live in England, Wales and Northern Ireland, and Trust Deeds are only available to people who live in Scotland. This is perhaps why some people assume that a Trust Deed must be Scotland’s version of an IVA.

While these two debt solutions do have a lot of similarities – and one of the key differences is simply geographical location – there are also some other factors that you need to consider.

Both IVAs and Trust Deeds are great solutions for avoiding bankruptcy or sequestration. They both involve formal agreements with your creditors to pay one affordable monthly payment for a set time period. So, there is the same principle behind both debt solutions, but there are also some key differences.

For example, when entering an IVA, you will be expected to make payments for 5 years; however, Trust Deeds require fewer payments, as the agreement usually lasts only 4 years. For an IVA, you need to have an unsecured debt level of at least £7,000; whereas, with a Trust Deed, the minimum unsecured debt level is just £5,000.

Due to the lower debt level accepted on a Trust Deed, your debt can be from one single line of credit – like a loan or a credit card. For an IVA, you need to have at least two forms of credit. You can have these two lines of credit with one or more creditors – so, if your debts consist of a credit card and loan, both from the same bank, you still fit the IVA criteria.

In summary

IVAs & Trust Deeds are very similar debt solutions. They both involve an agreement with your creditors to freeze interest and charges – and prevent legal action – while you make one single monthly repayment that you can afford. You will only make payments for a set period of time, and then usually a large proportion of your debt will be written off.

The principle of these debt solutions are the same, but there are important differences – especially the length of the repayment period, and the qualification criteria.

An IVA is only available in England, Wales and Northern Ireland, while a trust deed is only available in Scotland.

If you still have questions about which solution might be best for you, call us on 0800 316 1833 and one of our debt advisers will be able to talk you through your options.

We offer FREE advice on all debt solutions, and we will always ensure we look at the best options for your own particular circumstances.

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*In the case of a one-off lump sum settlement

More Information on IVAs

FAQs

What if I become seriously ill?

Please contact us as soon as possible. We know these conversations can feel difficult – but you’re not alone, and our dedicated Vulnerability Team is here to support you with care and practical guidance.

Your Insolvency Practitioner (IP) may speak to your creditors and request early completion of your IVA on compassionate grounds.

What happens if I come into money during my IVA?

If you receive a financial windfall – such as inheritance, compensation or lottery winnings – you’ll usually need to pay all of it into your IVA.

Because your creditors have agreed to write off part of your debt at the end of your IVA, any extra funds must be considered.

If the amount’s large, you may be able to offer an early Full and Final settlement.

If friends or family want to help with a lump sum, creditors may accept it as a settlement offer. It doesn’t have to cover everything you owe, but it must be fair and reasonable.

Can I settle my IVA early?

Yes – you can ask to offer a lump sum as a Full and Final settlement.

Your creditors will vote on the offer at a Variation Meeting.
Even if accepted, your IVA stays on your credit file for six years from the original start date.
It remains on the Insolvency Register for three months after completion or termination.

Early settlement can give flexibility, but you’ll still need to rebuild your credit after it completes.

Can I add debts to my IVA?

Because an IVA is a legally binding agreement, adding new debts can be difficult.

Forgotten debts: If a debt was missed at the start, it may still be possible to add it. Sometimes a second Creditors’ Meeting is required if the debt is significant.
New debts: If you’ve taken on new borrowing since your IVA began, contact us immediately. We’ll explain your options and what this means for your arrangement.

Can an IVA affect citizenship?

Your IVA will appear on the Insolvency Register, which may be visible during a citizenship assessment. It doesn’t automatically prevent approval – and in many cases, it reflects that you’re actively managing your debts responsibly.

IVAs & Trust Deeds

Trust Deeds

What’s the difference?

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The Scottish IVA

In summary

More Information on IVAs

FAQs

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