Does A Trust Deed Stop A Bank Arrestment In Scotland?
Not in the way it stops a wage arrestment. Section 173 of the Bankruptcy (Scotland) Act 2016 cuts an earnings arrestment dead on the date of protection, automatically, and there is no equivalent section for a bank arrestment anywhere in Part 14.
A creditor bound by your trust deed will not arrest your account. The reason is different from the one that ends a wage arrestment, and the difference decides what you can rely on.
- 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
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- No obligation
Account frozen and considering a trust deed? Check what protection reaches.
Free, confidential and no obligation.It also decides the timing, which is where people get hurt. Protection starts weeks after you sign, and what happens between signing a trust deed and it becoming protected covers that gap in full.
Here is what section 173 actually reaches, why a bound creditor cannot arrest anyway, and what is honestly not settled about money already frozen. What a protected trust deed is covers the solution itself.
What diligence does section 173 actually stop?
Three things and no more. On the date of protection any current earnings arrestment, any current maintenance arrestment and, with one carve-out, any conjoined arrestment order ceases to have effect.
The words are narrow on purpose
Section 173 of the Bankruptcy (Scotland) Act 2016 also makes the execution of a new earnings arrestment, or the making of a conjoined arrestment order, incompetent after protection for a debt claimable under the deed.
The carve-out is at section 173(3). Sums an employer already paid to the sheriff clerk under a conjoined arrestment order are still disbursed, even where the payment out happens after protection.
None of that touches a bank account. Does a trust deed stop a wage arrestment deals with the earnings side, which is the part the statute answers cleanly.
Diligence by diligence
| Diligence | Position once the deed is protected | Provision |
|---|---|---|
| Earnings arrestment | Ceases to have effect on the date of protection, automatically | s.173(2) |
| Current maintenance arrestment | Ceases to have effect on the date of protection | s.173(2) |
| Conjoined arrestment order | Ceases to have effect, though sums the employer already paid the sheriff clerk are still disbursed | s.173(2) and (3) |
| A new earnings arrestment or conjoined arrestment order | Not competent after protection for a debt claimable under the deed | s.173(5) |
| Bank or funds arrestment | No provision in Part 14 at all | Nothing to cite |
| Attachment of goods | No provision in Part 14 at all | Nothing to cite |
| A creditor's inhibition | No provision cancelling one. The trustee may agree to recall an inhibition as part of a heritable property agreement | s.175(1)(c) |
| The trustee's own inhibition | The trustee may record one and recall it once the estate is distributed | Schedule 4, paragraph 3 |
The right-hand column is the honest part. Where it says nothing to cite, that is because there is nothing to cite.
Why is there no bank arrestment provision in Part 14?
Because Parliament did not put one there. Part 14 runs from section 162 to section 193 with schedule 4 alongside it, and reading the whole of it as a section list turns up no provision about an arrestment of funds, an attachment or a creditor’s inhibition.
This is an absence that was checked, not assumed
The headings across Part 14 cover protected status, the trustee, contributions, the register notice, registration, removal of protected status, dividends, discharge and the administration of the trust. Diligence appears in exactly one section heading, and that heading says earnings.
The Accountant in Bankruptcy’s guidance for trustees under protected trust deeds matches the statute. Its diligence chapter deals with earnings-based and maintenance-related enforcement, and nothing else.
What the Act does say about other diligence
- Schedule 4, paragraph 3 lets the trustee record a notice of inhibition and recall it once the estate is distributed. That is the trustee protecting the estate, not a creditor’s inhibition being cancelled.
- Section 175(1)(c) lets the trustee agree to recall an inhibition as part of a heritable property agreement on Form 1B.
- Section 172(3)(b) stops a secured creditor who signed the Form 1A exclusion from doing diligence against assets conveyed to the trustee.
Read schedule 4 to the Act and the pattern is clear. None of the three is a general rule cancelling an arrestment on a bank account.
Advisers who assume the bankruptcy rules apply are wrong
Sequestration has its own equalisation-of-diligence machinery. Schedule 4 does not apply it to trust deeds, so does bankruptcy stop a wage arrestment in Scotland describes a different regime and must not be read across.
So why will a bound creditor not arrest your bank account?
Because of accession, not diligence law. Every creditor in a protected trust deed has either acceded to it or, under section 172(1)(a), has no higher right to recover the debt than a creditor who did, and an acceding creditor cannot enforce.
How accession happens, and it is not a vote
Section 170(2) deems creditors to have acceded unless the trustee receives written objection, within the relevant period, from a majority in number or no fewer than one third in value of them. Silence counts as accession.
Section 193 fixes the relevant period at five weeks beginning with the date the notice under section 169 is registered. Section 193 is where that period is defined, and section 170 is the deeming provision.
That is the opposite of how it is usually described. The test is whether enough creditors object, not whether enough approve, and a creditor who never replies is counted as having accepted.
What section 172(1)(a) does to the creditors who did not accede
A creditor who was never notified, or who objected in time, is not left free to chase you. Section 172(1)(a) gives that creditor no higher right to recover the debt than an acceding creditor has.
So every creditor is levelled down to the position of one who signed up. That is why a creditor bound by the deed will not arrest your account.
A creditor whose debt arose after you signed is not bound by it, because it is not a creditor in the deed. Nothing in section 172 reaches a debt the deed never covered.
Money frozen in your account? Get free help
Free, confidential and no obligation.Why does the date of protection matter more than the date you sign?
Because nothing in the last two sections happens on signature. Protection runs from the date of registration under section 163(2), and the weeks in between are the exposed period.
The gap is weeks, not days
Under section 163(2) a trust deed has protected status from the date on which it is registered by the Accountant in Bankruptcy. Before that date the deed binds nobody who has not agreed to it.
The statutory steps in between are a minimum of three clear days to consider the advice materials, five weeks for creditors to object, up to four weeks for the trustee to apply, then seven days for the decision and seven more for notification.
Added up, that is a floor of roughly six weeks from signing and an outer limit of around eleven or twelve. That is arithmetic from the statute rather than a published average.
The statutory moratorium is how the gap is normally covered
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.
A statutory moratorium is the exception. 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.
For a bank arrestment that exception does not bite, because it is written for earnings. How a statutory moratorium protects you sets out what it does and does not cover.
A moratorium does stop arrested funds being released to the creditor under section 73J of the Debtors (Scotland) Act 1987, by section 197(3)(d).
The two fit together deliberately
The six months runs from the day the entry is made in the register. It ends early if sequestration is awarded, a trust deed becomes protected, a Debt Payment Programme is approved, or you withdraw the notice.
It can run past six months where an application is already in: until a sequestration application is decided or withdrawn, until a Debt Payment Programme application is decided or withdrawn, or for up to seven further weeks while a trust deed seeks protected status.
What happens to money already frozen in your account?
That is not settled, and no page should pretend otherwise. Part 14 says nothing about a funds arrestment executed before protection, no Accountant in Bankruptcy guidance addresses it, and the sequestration rules are not applied to trust deeds.
Say it plainly rather than guessing
What cannot be promised is that protection releases those funds by operation of law. Part 14 has no provision for it and none was found anywhere else.
Ask your trustee, in writing, what happens to those specific funds. What a bank arrestment is in Scotland explains the mechanics you are dealing with in the meantime.
The related point that is settled
Money already deducted from your wages before the date of protection is not returned to you. It is credited against the debt instead, so ask the creditor for a written balance once the arrestment ends.
The rules that govern arrested money
| The point | The rule |
|---|---|
| The protected minimum balance | Only the balance above £1,000 can be attached, on the face of section 73F(3)(a) of the Debtors (Scotland) Act 1987 since 1 November 2022 |
| When funds go to the creditor | 14 weeks from execution, unless something intervenes |
| Notice of objection | Four weeks from execution |
| The unduly harsh application | Sections 73Q and 73R, on Form 63G, at any time while the arrestment has effect |
| Who counts as a dependant | Spouse, civil partner, cohabiting partner and children under 16, under section 73R(4) |
| Council tax arrestments | Section 73A(4) brings a summary warrant inside the meaning of decree, so the unduly harsh route reaches a council arrestment too |
The unduly harsh application under sections 73Q and 73R of the Debtors (Scotland) Act 1987 is a route that exists independently of the trust deed, and the sheriff shall order release where satisfied the arrestment is unduly harsh to you or a dependant.
There is no equivalent hardship route against an ordinary earnings arrestment. That asymmetry is worth knowing if both are running at once.
Do sheriff officers stop chasing you once the deed is protected?
They should, because their instructions come from creditors who are now bound. Sheriff officers act on creditor instructions, so once a creditor has no higher right to recover than an acceding creditor, the instruction behind the doorstep visit falls away.
Give the trustee the complete list
A creditor who is never notified is still bound as to recovery, but a missed creditor causes avoidable contact. Our sheriff officer advice covers what these firms can and cannot do.
Include anyone chasing through an agency or a debt purchaser, because the name on the letter is often not the name of the creditor.
The remedy a non-acceding creditor keeps
Section 177 lets a creditor who was not notified, or who objected in time, petition for your sequestration within five weeks of registration of the section 169 notice. After that window they need to aver undue prejudice in the distribution, or that the trustee refused your discharge.
The sheriff awards sequestration only if satisfied it is in creditors’ interests, or that those averments are correct. A creditor who does not reply at all is counted as having acceded.
Is a trust deed the right way to deal with a bank arrestment?
It is one way, and it is a heavy one. A protected trust deed is formal insolvency with a payment period of 48 months from the date of granting, a public register entry and a credit file effect that outlasts the payments.
The two arrestments compared
| Wage arrestment | Bank arrestment | |
|---|---|---|
| What it catches | A slice of your net pay every pay day | The balance sitting in your account at one moment |
| What a protected trust deed does to it | Ends it, by force of section 173, on the date of protection | Nothing directly. Part 14 contains no provision about it |
| Why it stops anyway | Because the statute says so | Because the creditor is bound by the deed and an acceding creditor cannot enforce |
| When it stops | Date of protection, not date of signing | Same date, for the same reason |
| Money already taken | Credited against the debt and not usually refunded | Not established. Ask your trustee and a money adviser |
| Is there a hardship route? | No. Section 50 of the 1987 Act reviews validity and operation, not affordability | Yes. Sections 73Q and 73R, on the ground that the arrestment is unduly harsh |
If both are running, can both your bank and your wages be arrested at once explains how the two interact.
What to weigh it against
A Debt Payment Programme under the Debt Arrangement Scheme stops an existing earnings arrestment on approval and is not an insolvency solution.
- Section 167(1)(b) binds you to convey estate acquired in the four years after granting, which catches an inheritance or a windfall.
- Trustee fees and outlays come out of your contributions rather than being billed to you separately.
- The deed is recorded on the public Register of Insolvencies for anyone to search.
Whether that trade is worth making depends on your income, your assets and how much you owe. Which debt solution is best if you have a wage arrestment compares the routes, and our trust deed page sets out how we help.
Frequently asked questions
Does a trust deed stop a bank arrestment in Scotland?
Not by any provision in the Act. Part 14 of the Bankruptcy (Scotland) Act 2016 contains no section about a bank arrestment, so what protects your account is that every creditor is bound by the deed and an acceding creditor cannot enforce.
What does section 173 actually cover?
An earnings arrestment, a current maintenance arrestment and a conjoined arrestment order. All three cease to have effect on the date of protection, and no new earnings arrestment can be executed for a debt claimable under the deed.
Does signing a trust deed stop an arrestment straight away?
No. Protection runs from the date the Accountant in Bankruptcy registers the deed under section 163(2), which is weeks after signature, and until then the deed binds nobody who has not agreed to it.
Will money already frozen in my account be released?
That is not established. Nothing in Part 14 addresses a funds arrestment executed before protection, so ask your trustee and a money adviser about those specific funds rather than relying on a general rule.
How much money is protected in a bank arrestment?
Only the balance above £1,000 can be attached. That figure sits on the face of section 73F(3)(a) of the Debtors (Scotland) Act 1987 and has done since 1 November 2022.
Can frozen funds be released any other way?
You can apply to the sheriff under sections 73Q and 73R of the 1987 Act on the ground that the arrestment is unduly harsh to you or a dependant. The application is on Form 63G and can be made at any time while the arrestment has effect.
What covers me between signing and protection?
A statutory moratorium is the normal answer. It gives six months, stops new diligence, and can run for up to seven further weeks while a trust deed is seeking protected status.
Do sheriff officers have to stop once the deed is protected?
Once the deed is protected every creditor is bound, and a non-acceding creditor has no higher right to recover than an acceding one under section 172(1)(a). Sheriff officers act on creditor instructions, so those instructions should be withdrawn.
Related guides
- Does A Trust Deed Stop A Wage Arrestment? Protection, not signing, is what stops the deduction. What covers the gap, and the real downsides of a trust deed.
- What Is A Bank Arrestment In Scotland? How a creditor freezes a bank balance, the £1,000 protected minimum, and how a sheriff can order money released.
- Can Both Your Bank And Your Wages Be Arrested At Once? Why one creditor can run both at once, what each side protects, the deadlines that differ, and what happens to wages already in the account.
- 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.
- 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 Does A Statutory Moratorium Protect You? Six months of protection, one per rolling 12 months, what it stops, what it leaves running, and how it differs from Breathing Space.
- What Happens If You Move House Or Change Jobs During A Trust Deed? Who to tell and how quickly, what happens to an employer payment instruction, how changed housing costs are treated, and where redundancy pay goes.
- 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.
- Which Debt Solution Is Best If You Have A Wage Arrestment? How the Debt Arrangement Scheme, a trust deed, sequestration and a Time to Pay Order compare against a live arrestment, and which fits when.
- 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.
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.