This worry stops people getting help. Somebody will sit with a wage arrestment coming off their pay for months rather than risk a conversation with HR.

There is also a claim on the Scottish Government’s own trust deed pages that does not hold up in law, and it is dealt with below. What a protected trust deed is covers the solution itself.

No general duty exists. The obligations in Part 14 run the other way, and it is your trustee who is required to raise employment with you before you sign anything.

What the Act does require

Section 167(3) requires the trustee to give you the debt advice and information package and the trust deed information document, and to advise you on the consequences of granting the deed, including the possible effect on your employment.

You also have to be given time to think. Scottish Ministers’ guidance under section 167(5) sets adequate time at a minimum of three calendar days, counted excluding the day the materials reach you and the day you sign.

Use those days for this question. It is exactly the kind of thing they exist for.

Where a duty can actually come from

None of the ones that do come from insolvency law. They come from terms you already agreed to, which is why reading the contract matters more than reading the statute.

Being a company director is not restricted by a trust deed as a matter of law. The disqualification in section 11 of the Company Directors Disqualification Act 1986 applies to an undischarged bankrupt, which someone in a protected trust deed is not.

Your own deed’s terms may still restrict it, and so may a company’s articles of association.

The government page says otherwise, and it is not a statutory disqualification

mygov.scot’s page on how a trust deed could affect you states that you cannot be a company director unless your trustee agrees. No statutory disqualification supporting that could be found in the 2016 Act or in the Company Directors Disqualification Act 1986.

Section 11 of that Act is the provision people have in mind. It disqualifies an undischarged bankrupt, and a protected trust deed is not sequestration.

So where does the restriction come from

Most likely from the terms of the trust deed itself and from a company’s own articles of association. Those are real constraints and they may well apply to you, but they are a matter of what you signed rather than a bar imposed by Parliament.

• Ask your trustee, in writing, what your particular deed says about a directorship.
• Check the company’s articles, which can disqualify a director on grounds of their own.
• Do not rely on a general statement either way, including a government one.

In one situation. Your employer is contacted where a payment instruction is issued under section 174, and that only becomes available after two consecutive missed contributions.

The two-stage structure, which nobody explains

Section 174 does not begin with the trustee going over your head. Subsection (2) has the trustee request that you give your employer the prescribed instruction, and it is only if you fail to comply that subsection (3) lets the trustee instruct the employer directly.

So the first move is yours. That matters if you would rather the paperwork came from you than from an insolvency practitioner.

The three forms

How trust deed payment instructions to employers work covers the mechanics in detail, including what the employer has to do next.

What the employer must do, and what it may charge

Subsection (5) says the employer must comply. An employer that fails without good cause is liable under subsection (6) to pay on demand the amount that should have been paid, and may not recover it from you.

Subsection (7) lets the employer charge a fee equivalent to the fee under section 71 of the Debtors (Scotland) Act 1987, which regulation 3 of SSI 2006/116 prescribed at £1.00 with effect from 5 April 2006.

Subsection (8) requires the trustee to notify recall of the instruction without delay after your discharge. Ask for confirmation that it has been done.

Through the public register, in principle. The Register of Insolvencies is maintained by the Accountant in Bankruptcy, anyone can search it free of charge, and registration is what gives the deed its protected status.

A record existing is not the same as somebody looking

Section 200 requires AiB to make the register available for inspection at all reasonable times and to provide any person, on request, with a certified copy of an entry.

A record existing is not the same as somebody looking at it, and how often any particular kind of searcher uses the register is not something the published sources record. Whether your trust deed appears on the Register of Insolvencies sets out what the entry actually shows, which is less than people fear.

Who realistically knows, and how

Neighbours, friends and family are not notified, and nobody visits your home because of a trust deed. Will your colleagues find out about your wage arrestment covers the equivalent question for a deduction already running.

It can, and in a regulated financial services role it very likely does. mygov.scot advises checking your employment contract before signing, and notes that some employers do not allow people who have signed a trust deed to work for them.

Reading the clause properly

• Check whether it names insolvency generally, or only sequestration or bankruptcy.
• Check whether it requires disclosure, or only permits action if disclosure is not made.
• Check any staff handbook or code of conduct the contract refers to.
• Where you hold a professional registration, check that body’s rules separately.

Regulated roles: do not assume a trust deed is invisible

The Financial Conduct Authority’s fit and proper test lists financial soundness among its considerations, and FIT 2.3, in the version in force at the date of writing, expressly names arrangements a person has made with their creditors, and having had assets sequestrated, among the factors a firm should have regard to.

A protected trust deed sits squarely within arrangements with creditors. Anyone telling you a regulated employer cannot take it into account is wrong.

The test does not apply to everyone in financial services, though, and its scope is set by a Handbook module with a further version due on 1 September 2026. Whether a wage arrestment can affect your job in financial services is worth reading before you assume you are inside it.

The counterweight, in the FCA’s own words

FIT 2.3.2G, again in the version in force at the date of writing, says the FCA will not normally require a candidate to supply a statement of assets or liabilities, and that the fact a person may be of limited financial means will not, in itself, affect their suitability to perform a controlled function.

It adds that the FCA would expect a firm to take a similar view. That sentence is worth having to hand if the conversation ever happens.

Payroll sees a deduction line disappear and net pay go up. An earnings arrestment ceases to have effect on the date your trust deed becomes protected, and nobody outside payroll needs an explanation for that.

The trigger is protection, not signature

Section 173 operates on the date of protection, which is when AiB registers the deed. Between signing and that date the deductions carry on, which is why a statutory moratorium is often run alongside.

Does a trust deed stop a wage arrestment sets out the timing in full, including what covers you in the gap.

Money already taken

Deductions made before the date of protection are not returned to you. They are credited against the debt instead, so ask the creditor for a written balance once the arrestment ends.

Section 173 also stops a creditor executing a new earnings arrestment for a debt claimable under the deed. The line should not reappear.

No provision of Scottish insolvency law permits it, but that is not the same as protection. The risk, where it exists, comes from contractual terms and professional rules rather than from the 2016 Act.

Be careful not to overstate the position

There is no law allowing an employer to dismiss someone for having money taken from their wages, and none allowing dismissal for granting a trust deed. Ordinary unfair dismissal rights depend on two years of qualifying service.

So the honest answer is that insolvency law is silent and employment law does the work. Take advice on your own contract rather than relying on a general rule.

Four questions worth asking before you commit

• Does my contract or professional body require me to disclose formal insolvency?
• How will my contribution be collected, and would payroll ever be involved?
• What happens to the wage arrestment I already have, and on what date?

And the fourth: is a trust deed the right fit at all, compared with the Debt Arrangement Scheme, which is not an insolvency solution.

If a change of job is on the horizon, what happens if you move house or change jobs during a trust deed covers the disclosure duty that runs alongside all of this.

Citizens Advice Scotland, StepChange and National Debtline will answer these questions free of charge. Whether to use a free debt charity or a paid debt adviser covers the choice, and our trust deed page sets out how we help.