The date that matters is the date of protection, not the date you sign. That gap catches people out and it is the single most useful thing to understand before you start.

Here is which council tax goes in, what protection does and does not stop, whether the council can block it, and what it costs. What a protected trust deed is covers the solution itself.

Arrears you owe at the date you grant the deed. The council becomes a creditor bound by the trust deed like any other, and once the deed is protected it cannot start or continue enforcement for the debts included.

In and out

The line falls at the date of granting, and your trustee will tell you exactly where it lands in your case.

A rule about the council’s claim that is worth knowing

The Accountant in Bankruptcy’s guidance for trustees says that where a local authority claims council tax and the debtor has already paid part of the period claimed, the authority should reduce its claim accordingly.

So check the years and the amounts on the council’s claim against what you have actually paid. How to reach the right council team about council tax arrears covers who to ask for the breakdown.

What the arrears then become

Once the deed is protected the council is an ordinary creditor bound by it, ranking alongside everyone else for a dividend. It cannot start or continue enforcement for the debts included.

Yes, on protection. Section 173 says that when a trust deed becomes protected, any earnings arrestment, current maintenance arrestment or conjoined arrestment order ceases to have effect, and no new one can be executed.

Read the date carefully

Signing the deed does nothing to an arrestment on its own. Between signing and protection the deductions carry on, and does a trust deed stop a wage arrestment covers the timing in detail.

The provision is in Part 14 of the Bankruptcy (Scotland) Act 2016, and it is the trigger that matters most to anyone already losing part of their pay.

What protection does not reach

Section 173 deals with earnings-based and maintenance-related diligence. Part 14 contains no equivalent provision for a bank arrestment, an attachment or a creditor’s inhibition.

So do not assume protection sweeps everything away. Ask your trustee about anything already in place other than an earnings arrestment.

The moratorium is not the gap-filler people think

A statutory moratorium gives six months of protection and you get one per rolling 12 months. It stops service of a charge for payment, stops new diligence and stops creditor petitions for sequestration.

It does not stop an earnings arrestment that was already running. Section 197(5)(d) of the Bankruptcy (Scotland) Act 2016 lets a creditor carry on executing an earnings arrestment, a current maintenance arrestment or a conjoined arrestment order that came into effect before the moratorium began.

So on a council tax arrestment already running, the moratorium buys time against everything else and not against that deduction. Protection is what ends it.

Money already taken

Deductions made before protection are credited against the debt rather than refunded. What happens to money already taken when a wage arrestment stops covers that, and it is worth asking for a written balance once the arrestment ends.

Protection is prevented only where, within five weeks of publication of the notice in the Register of Insolvencies, the trustee receives written objections from a majority in number of notified creditors, or from creditors holding not fewer than one third in value.

The test is either or, not both

One creditor holding a third of the value by itself can prevent protection. Where council tax is the bulk of what you owe, that creditor could be the council.

Creditors who say nothing are deemed to have acceded, and the five weeks begin the day after publication.

The road to protection, step by step

Adding those statutory steps together gives a floor of roughly six weeks from signing to protection, and an outer limit of around eleven or twelve weeks. That is arithmetic from the statute rather than an observed average.

If the council is your biggest creditor

That does not put a trust deed out of reach. It means the proposal has to look reasonable to the council, and your trustee will know how the local authority tends to respond.

If protection is blocked the deed does not vanish, but it loses the statutory effects, including the protection against diligence. Talk through the alternatives, including the Debt Arrangement Scheme, before it gets to that point.

Yes. A trust deed deals with debts you owe when you grant it, so council tax charged for periods after that has to be paid as it falls due, on top of your monthly contribution.

Build it into the budget from the start

A new set of arrears building up during the deed undoes much of the benefit, and the council can run the recovery process again on the new debt. What happens if you do not pay your council tax in Scotland sets out that sequence.

Four things to do with the council

• Tell the council in writing which debt is in the trust deed, and give them your trustee’s details.
• Set up a direct debit for the current year so the ongoing charge does not slip.
• Say in writing which financial year a payment is for, because there is no statutory rule setting the order.
• Check whether Council Tax Reduction, a single person discount or a disregard should be reducing what you have to find each month.

That last point is the one people skip. What benefits to check if you are struggling with council tax runs through the reductions in order.

Yes, and it is statutory. Section 164(3) of the 2016 Act requires the total amount of your debts, including interest, at the date you grant the deed to be not less than £5,000.

What that figure is and is not

It is a condition of protection rather than a practitioner’s preference, so below it a trust deed cannot become protected.

It is not the bankruptcy figure either. The Minimal Asset Process has had no minimum debt since 6 February 2023, which what Minimal Asset Process bankruptcy is explains.

The affordability ceiling at the other end

Section 168(4) requires that, for an individual, contributions across the payment period total less than the total debt including interest at the date of granting. AiB will not register a deed where the projected contributions would repay everything.

So a trust deed is for someone who cannot repay in full. If you can, the Debt Arrangement Scheme is the route that avoids insolvency.

It is formal insolvency, recorded on the public Register of Insolvencies, with a payment period of 48 months from the date of granting and your assets forming part of what the trustee deals with.

The contribution

Section 168(3) puts the whole of your surplus income, meaning total income less allowed expenditure, towards creditors. The trustee’s fees come out of the contributions rather than being billed to you separately.

Contributions cannot be drawn from Universal Credit, Social Security Scotland benefits or tax credits, though those are taken into account in assessing other income.

The asset a competitor page will not tell you about

Section 174 lets the trustee instruct your employer to deduct the contribution and remit it, after two consecutive missed payments. The instruction goes on prescribed forms, and the employer is liable for non-compliance.

The employer may also charge you the same fee it could charge under the earnings-diligence legislation in the Debtors (Scotland) Act 1987. So a deduction from wages can follow you into a trust deed if the payments stop.

What the outcome tends to look like

The Accountant in Bankruptcy reported a mean dividend to ordinary creditors of 16.3p in the £ across protected trust deeds in 2024-25, on a median debt level of £18,300. Those are published outcomes rather than a promise about your case, and which debt solution is best if you have a wage arrestment compares the options.

Interest is not claimable in the trust deed beyond the date of granting, because claims are valued as at that date. That is a rule about the claim rather than a prohibition on the creditor.

No, it is not automatic at 48 months. The trustee applies to AiB for your discharge with a statement that you met your obligations and co-operated, and the date AiB registers that application is the date of your discharge.

Discharge can be refused

AiB may refuse to register where it is not satisfied that you co-operated, declared your assets and income fully, and made the required contributions. Any party may appeal to the sheriff within 21 days.

Since 1 July 2024 the trustee can also apply for AiB’s agreement to refuse a discharge where a debtor has unreasonably failed to comply. If that succeeds, creditors cease to be deemed to have acceded and can enforce again.

Grounds that are not proper reasons to refuse

• A change of circumstances that prevents you paying a contribution.
• Assets realising less than the trustee originally estimated.

After discharge

The trust continues until realisation and distribution are complete and the trustee obtains their own discharge. AiB’s information document says the Register of Insolvencies entry appears for the deed’s duration plus 12 months after completion, and our trust deed page sets out how the process runs.

Credit reference agencies record insolvency, and mygov.scot puts the credit file effect at six years from when the trust deed begins. Council tax arrears themselves were never reported to them.

It is one of three. The Debt Arrangement Scheme repays in full without insolvency, the Minimal Asset Process is a short form of sequestration for people with very little, and a trust deed sits between them.

The three side by side

Which is right depends on how much you owe, what you can pay and what you own. How long a Debt Payment Programme lasts and whether council tax arrears can go into a Debt Arrangement Scheme cover the alternative in detail.

Points to raise before you sign

• How any equity in your home would be dealt with, and what happens if there is none.
• Whether the council is likely to object at the protection stage.

None of that is a reason to rule a trust deed out, and every one of them is a reason to talk to a free adviser first. Whether to use a free debt charity or a paid debt adviser covers that choice, and our council tax debt advice page sets out how we help.