Are Trust Deed Providers In Scotland Regulated?
Yes, but not by the regulator most pages name. Only a person qualified to act as an insolvency practitioner under section 390 of the Insolvency Act 1986 may act as your trustee, and the Accountant in Bankruptcy registers every protected trust deed and supervises trustees under section 200 of the Bankruptcy (Scotland) Act 2016.
People searching this are asking two questions at once: whether the procedure is legitimate, and whether the company advertising it is accountable to anyone. What a protected trust deed is answers the first.
- Part of your pay is protected by law
- The deduction is set by statutory tables, not the creditor
- An arrestment can be stopped or replaced
- Free & confidential
- No obligation
About to sign with a trust deed firm? Check who is actually regulating them.
Free, confidential and no obligation.A trust deed is not a product a company invented. It is a statutory procedure under Part 14 of the Bankruptcy (Scotland) Act 2016, with prescribed forms, statutory deadlines and a public register.
The second question has a longer answer, because three different bodies regulate three different things. Our trust deed page sets out how we help, and this page sets out who is accountable for what.
Who is allowed to act as your trustee?
A licensed insolvency practitioner, and nobody else. They must be qualified to act under section 390 of the Insolvency Act 1986 and must not hold an interest opposed to the general interest of your creditors.
The statutory conditions on the person
Section 165 of the 2016 Act adds a further test: the person must not be disqualified by section 49(3) to (5) from acting as a replacement trustee in a sequestration. mygov.scot puts the practical position in one line, that a licensed insolvency practitioner is the only person who can arrange a trust deed.
Before accepting appointment the trustee must also be satisfied that a trust deed will benefit your creditors in general. The Accountant in Bankruptcy’s guidance for trustees treats that as a check on whether the procedure is appropriate at all.
The company in the advert is not always the practice
This is the point that catches people out. The firm whose advert you clicked is not always the insolvency practice that will hold your estate.
Ask for the name of the individual who will be your trustee and the firm they work for, and expect a clear answer. How you apply for a trust deed sets out the steps that follow.
Which body authorises an insolvency practitioner?
A recognised professional body, not a government department. Authorisation is personal to the individual practitioner rather than to the firm on the letterhead.
Three regulators, three different jobs
| Body | What it regulates | Where that comes from |
|---|---|---|
| A recognised professional body | Authorises the individual to act as an insolvency practitioner at all | The GOV.UK list of recognised professional bodies, as published on 23 June 2021, names ICAS, the Insolvency Practitioners Association and the ICAEW |
| The Accountant in Bankruptcy | Registers protected trust deeds and supervises how trustees carry out their statutory functions | Section 200 of the Bankruptcy (Scotland) Act 2016 |
| The Financial Conduct Authority | Authorises firms carrying on debt counselling or debt adjusting by way of business | Articles 39E and 39D of the 2001 Regulated Activities Order |
| The sheriff | Hears appeals, and can censure a trustee who does not comply with a direction | Sections 179 and 184A of the 2016 Act |
The GOV.UK page carrying that list was last updated on 23 June 2021. It does not record whether any body has since stopped being recognised.
So do not take the names on trust, including from this page. Ask which body authorises your trustee and check the current list before you sign.
A large firm can have very few licensed people
A firm may have several licensed practitioners and many staff who are not licensed at all, which is the reason to ask for a name rather than a brand. How much a trust deed costs covers what that person will be paid.
Is it the Financial Conduct Authority that regulates trust deeds?
No. The Financial Conduct Authority authorises firms for debt counselling and debt adjusting, and it is not the body that authorises the person who will act as your trustee.
What the FCA does authorise
Two things are specified activities under the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001. Article 39E covers giving advice to a borrower about the liquidation of a debt, and article 39D covers negotiating with a lender on a borrower’s behalf.
That is the regulation of debt advice given by way of business. It is a different activity, carried on by a different firm, from acting as trustee under a trust deed.
Why the distinction matters to you
Section 183(6) of the 2016 Act puts anyone who advised you before the deed was granted behind the creditors in the order of payment. The statute plainly contemplates that the adviser and the trustee can be different people.
So there can be two firms and two regulators in the same transaction. Whether to use a free debt charity or a paid adviser is worth reading before you speak to either.
The two checks that follow
For the firm that advised you, the Financial Conduct Authority tells consumers to check its Financial Services Register to confirm the firm is authorised and has permission for the service it is offering.
The FCA also warns about lead generators, which collect details through questionnaires, cannot themselves give debt advice, may push particular products because they receive referral payments, and often rank highly in search results.
For the practitioner, the check is different. Ask the authorising body whether that individual holds a current licence.
Been contacted about a trust deed and want a second opinion? Get free help
Free, confidential and no obligation.What does the Accountant in Bankruptcy actually do?
It decides whether a trust deed becomes protected, keeps the Register of Insolvencies, and supervises how trustees carry out their statutory functions. Its powers are real and several of them are new.
Nothing becomes protected because a firm says so
The trustee applies within four weeks of the end of the objection period, and the Accountant in Bankruptcy checks that the statutory conditions are met and that the contribution accords with the common financial tool. What happens between signing and protection sets out the timetable.
Protection runs from the date of registration, under section 163(2), not from the date you sign. The weeks in between are the exposed period.
The powers, and what each is for
| Power | Where it comes from | What it means for you |
|---|---|---|
| Refuse to register the deed as protected | Where the statutory conditions are not met | Nothing becomes protected because a firm says so |
| Issue a binding direction on the administration of the trust | Section 179. The trustee must comply within 30 days | Non-compliance can lead to censure or other court orders after a sheriff hearing |
| Remove protected status | Sections 171A to 171C, in force since 1 July 2024, where a material error or irregularity is identified within three months of the date of protection | Protection ceases 14 days after the notice unless a review is applied for |
| Appoint itself as trustee | Section 186A, where the existing trustee cannot continue and no replacement is found | Includes where the trustee is no longer authorised to act |
| Decide whether your discharge may be refused | Section 184A, in force since 1 July 2024 | A trustee can no longer refuse a discharge on their own |
Its supervisory role sits in section 200 of the 2016 Act, which also requires it to keep the Register of Insolvencies.
The Accountant in Bankruptcy’s own guidance sets out what is not a proper reason to refuse a discharge: a change of circumstances that prevents you paying, and assets realising less than originally estimated. Whether your trust deed appears on the Register of Insolvencies covers the public record.
Where do trust deed fees come from, and can you challenge them?
Section 183(1) is an exhaustive list, and the word it turns on is only. A trustee may be remunerated only by a fixed fee, a percentage of the estate realised, and outlays.
There is no statutory tariff
The trustee sets the fixed fee and sends it to creditors during the five-week window, and no creditor approval is needed to set it. Only an increase needs a majority in value or the Accountant in Bankruptcy.
Fees and outlays come out of the contributions and realisations in the trust rather than a separate bill. What a trust deed costs goes through the arithmetic.
The right almost nobody mentions
You can have the fees audited. Schedule 4 paragraph 1 lets the debtor personally ask the Accountant in Bankruptcy to audit the trustee’s accounts and fix the remuneration.
That is a right you hold personally, not one your creditors have to exercise for you. Ask for the fee basis in writing before you sign, so you have something to measure against later.
Why the fee level changes what creditors get
Because fees are paid from the same pot as dividends, a small contribution over the minimum term can leave little for creditors once fees are met. Section 176 sets a threshold of at least 5 pence in the pound before a dividend is paid, and the guidance for trustees expects trustees to consider paying below it where the sums are still meaningful.
No percentage can honestly be promised at the outset. What is written off is whatever is left unpaid when you are discharged, which depends on what you can afford over the term and what your estate realises.
What should you check before you sign anything?
Eight things, and every one of them is something you are entitled to ask. The statutory minimum time to consider the papers is three clear days, and that time exists for exactly this.
The checklist
| What to check | Why it matters |
|---|---|
| Who your trustee will be, by name | Only a person qualified to act as an insolvency practitioner may act |
| Which body authorises them | Authorisation is personal to the practitioner, not to the brand on the letterhead |
| Whether the firm you called is the insolvency practice | Section 183(6) shows the statute contemplates a separate pre-deed adviser |
| The debt advice and information package and the trust deed information document | Both are required by section 167(3) before you grant the deed |
| At least three clear days to think | Scottish Ministers' guidance under section 167(5) sets that as the minimum |
| What the fixed fee is, in writing | There is no statutory tariff, and the trustee sets it |
| Whether the Debt Arrangement Scheme, the Minimal Asset Process or sequestration were discussed | A trust deed is one route of four, and the right answer turns on income, assets and debt |
| What happens between signing and protection | Section 173 ends an earnings arrestment on the date of protection, not the date you sign |
There is a statutory minimum. Section 164(3) of the Bankruptcy (Scotland) Act 2016 requires your total debts, including interest, to be not less than £5,000 at the date you grant the deed.
There is a ceiling as well as a floor. Section 168(4) requires contributions across the payment period to total less than your total debt including interest, so a deed cannot be registered where the projected contributions would repay everything, and the Debt Arrangement Scheme is the route for someone who can pay in full.
Treat any promise about a write-off with caution
Nobody can know at the outset how much will be written off, because it depends on your contributions, your assets and the fees taken over four years. A trust deed against the Debt Arrangement Scheme and a trust deed against a debt management plan compare the alternatives.
What can you do if something goes wrong?
Three routes, in order. Raise it with the trustee in writing, then with the Accountant in Bankruptcy, then with the professional body that authorises the practitioner.
Why the order matters
The trustee has to answer you first, and a written record of what you asked is what the other two will want. The Accountant in Bankruptcy supervises the statutory functions and can issue a binding direction.
The professional body deals with the individual’s conduct and their licence. What happens if your trust deed fails covers the position if things go further than a complaint.
If it went wrong at the very start
Protected status can be removed where a material error or irregularity is identified within three months of the date of protection, under provisions in force since 1 July 2024. That is a narrow window, so a free adviser is worth speaking to quickly.
Nobody has to use a paid provider to get a second opinion. A free adviser can compare the Debt Arrangement Scheme, the Minimal Asset Process and sequestration alongside a trust deed, and a trust deed against sequestration is the comparison people most often want first.
Frequently asked questions
Are trust deeds a scam?
No. A protected trust deed is a statutory procedure under Part 14 of the Bankruptcy (Scotland) Act 2016, registered by the Accountant in Bankruptcy and administered by a licensed insolvency practitioner.
Are trust deed companies regulated by the Financial Conduct Authority?
The FCA authorises firms for debt counselling and debt adjusting, which are specified activities under the 2001 Regulated Activities Order. It is not the body that authorises the person who will act as your trustee.
Who authorises an insolvency practitioner in Scotland?
A recognised professional body. The GOV.UK list of recognised professional bodies, as published on 23 June 2021, names ICAS, the Insolvency Practitioners Association and the ICAEW, and the current position on any individual licence is held by the authorising body.
Can anyone set up a trust deed for me?
No. mygov.scot states that a licensed insolvency practitioner is the only person who can arrange a trust deed, and section 165 of the 2016 Act adds further conditions on who may act.
Do trust deed companies earn commission?
Section 183(1) limits what a trustee may be paid to a fixed fee, a percentage of the estate realised and outlays. Ask the firm you first spoke to whether it is the insolvency practice or an introducer, and ask for the fee basis in writing.
Can you challenge your trustee's fees?
Yes. Schedule 4 paragraph 1 of the 2016 Act lets you personally ask the Accountant in Bankruptcy to audit the trustee’s accounts and fix the remuneration.
What can I do if my trustee is not doing their job?
Raise it with the trustee in writing, then with the Accountant in Bankruptcy, which supervises trustees under section 200 and can issue a binding direction under section 179. You can also complain to the body that authorises the practitioner.
Can a trust deed be undone if something went wrong at the start?
Protected status can be removed where a material error or irregularity is identified within three months of the date of protection, under provisions in force since 1 July 2024. Protection ceases 14 days after the notice unless a review is applied for.
Related guides
- What Is A Protected Trust Deed? What you sign, the 48-month payment period, how a deed becomes protected, what it does to an arrestment and what it leaves you owing.
- How Do You Apply For A Trust Deed In Scotland? Why there is no application, the six stages from signing to protection, the paperwork your trustee wants, and what changes on the date of protection.
- How Much Does A Trust Deed Cost In Scotland? What a trustee can charge, where the fees are written down before you sign, what the Accountant in Bankruptcy adds, and how to challenge an amount.
- What Happens Between Signing A Trust Deed And It Becoming Protected? What signing actually does, what creditors can still do before registration, whether a wage arrestment stops, and what covers you while you wait.
- Will Your Trust Deed Appear On The Register Of Insolvencies? At what point the entry appears, what it shows, who can search it, how long it stays there, and why it is not the same as your credit file.
- What Happens If Your Trust Deed Fails? The three ways protection ends, what happens to the money already paid in, a refused discharge, and whether a failed deed becomes bankruptcy.
- Should You Use A Free Debt Charity Or A Paid Debt Adviser? Who can set up a Scottish statutory debt solution, the rules a fee-charging firm must follow, who pays for each route, and how to check a firm.
- Which Is Better, A Trust Deed Or The Debt Arrangement Scheme? How the two Scottish routes compare on cost, length, creditor agreement and public record, and which one stops a wage arrestment sooner.
- What Is The Difference Between A Trust Deed And Sequestration? How each one begins, how long it runs, what it costs to enter, what happens to your home, and what each does to a wage arrestment.
- Which Jobs Can Be Affected By A Trust Deed In Scotland? Why no statute bars you from a job, where restrictions really come from, the financial services position, and directorships during a deed.
Written as general information about Scottish debt law rather than regulated financial or legal advice, and your own circumstances may change the answer. Free, impartial help is available from Citizens Advice Scotland, StepChange, National Debtline and Advice Direct Scotland.