Is A Debt Management Plan Or A Trust Deed Better If You Own Your Home?
Neither is better in the abstract, and the question turns on your equity. A debt management plan leaves your home entirely alone and protects you from nothing, while a protected trust deed protects you and puts the equity in issue.
One is a non-statutory agreement in the regulator’s own words. The other is a formal insolvency under Part 14 of the Bankruptcy (Scotland) Act 2016.
- 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
Own your home and weighing up a trust deed? Get free advice on your equity.
Free, confidential and no obligation.That difference in legal character drives every practical answer below. It is not a question of which product is kinder to a house.
What follows compares them on equity, enforcement, thresholds, cost and publicity. The general difference between the two covers the ground for someone who does not own a home.
What happens to your home under each option?
Under a plan, nothing at all. Under a trust deed, your estate is conveyed to a trustee, so the equity has to be dealt with.
The home, point by point
| The point | Debt management plan | Protected trust deed |
|---|---|---|
| Who owns it | You, and nothing changes | Your estate is conveyed to a trustee under section 167(1) |
| The equity | Not in issue at all | In issue, and it has to be dealt with one way or another |
| Your mortgage | Outside the arrangement, and you keep paying it | Outside the deed as a secured debt, and you keep paying it |
| Anything acquired later | Nothing is claimed | The deed binds you to convey estate acquired in the following four years |
| Who decides what happens to it | You do | The trustee does |
The conveyance is in section 167(1) of the Bankruptcy (Scotland) Act 2016, which also binds you to convey estate acquired in the four years that follow.
A plan touches unsecured debt only
Your mortgage sits outside a plan, your title is untouched and no trustee acquires any interest. That is the plan’s single largest advantage for a homeowner.
It is also why a plan does nothing for you if the pressure is coming from a secured lender. A plan has no answer to mortgage arrears.
The equity question has its own answers
How a trustee deals with a home depends on whether there is equity worth realising, and what happens to the equity in your home in a trust deed sets out the routes.
Whether you lose the house is a different question again, and whether you will lose your home in a trust deed answers it properly.
Which one protects you from sheriff officers?
Only the trust deed. A debt management plan has no statutory effect on diligence whatsoever.
What a plan does not do
A plan does not stop enforcement. It has no statutory effect on diligence at all.
No creditor has to accept a debt management plan, and nothing requires one to give a reason for refusing.
What protection does to an arrestment
Section 173 ends an earnings arrestment on the date of protection, automatically and with no application to any court.
There is no equivalent section for a bank arrestment anywhere in Part 14. What protects you instead is accession: every creditor either accedes or, under section 172(1)(a), has no higher right than one who did, and an acceding creditor cannot enforce.
For anyone with money already coming off their wages, that is the whole comparison. Whether a plan stops a wage arrestment sets out what does.
Protection is not immediate
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.
A creditor can act in that gap, which is why a statutory moratorium is normally run alongside to cover it. Ask your trustee what the timetable looks like and whether one is being used.
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A trust deed has a statutory minimum debt and a creditor test. A plan has neither, and that cuts both ways.
The threshold
There is a statutory minimum. Section 164(3) requires your total debts, including interest, to be not less than £5,000 at the date you grant the deed, a figure in force since 30 November 2016.
A plan has no minimum, no maximum and no eligibility test at all. Anyone can propose one to anyone.
The creditor test is about objection, not approval
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.
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.
Section 193 fixes the relevant period at five weeks beginning with the date the notice under section 169 is registered.
The two side by side
| The point | Debt management plan | Protected trust deed |
|---|---|---|
| Legal character | Informal, and binding on nobody | A formal insolvency under Part 14 of the Bankruptcy (Scotland) Act 2016 |
| Minimum debt | None | £5,000 including interest at the date you grant it, in force since 30 November 2016 |
| Creditor agreement | Each creditor decides, and none has to agree | Creditors are deemed to accede unless enough of them object in writing |
| Interest and charges | Frozen only if the creditor agrees | Interest is not claimable in the trust deed beyond the date of granting |
| An earnings arrestment already running | No effect at all | Ends on the date of protection, under section 173 |
| Public record | None anywhere | The Register of Insolvencies |
| What is written off | Nothing | Whatever is unpaid when you are discharged |
A plan binds nobody at all
A debt management plan is an informal arrangement rather than a statutory scheme. No Act of Parliament creates it, nothing prescribes its form, and it binds nobody by force of law.
A creditor can refuse the offer, keep charging interest and still sue you. Whether a plan freezes interest sets out what the rules do and do not require.
What does each one cost, and who runs it?
A trust deed is run by an insolvency practitioner and paid for out of your estate. A plan is run by a firm or a charity, and a commercial firm’s fee comes out of your payment.
Cost and length side by side
| The point | Debt management plan | Protected trust deed |
|---|---|---|
| Who runs it | A debt management firm or a charity, or you | An insolvency practitioner acting as trustee |
| What it costs you | Nothing from a charity, or whatever a commercial firm charges | A fixed fee, a percentage of the estate realised and outlays, all out of the estate |
| Is there a cap | No cap on a commercial provider's fee | No statutory tariff, though the fee can be audited |
| How long | Until the balances are cleared, with no fixed term | Normally 48 months of contributions |
| How it ends | The last balance is paid, or you stop | Discharge, once the trustee is done |
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 either way
There is no statutory tariff. The trustee sets the fixed fee in the Form 3 and sends it to creditors during the five-week window, and no creditor approval is needed to set it.
An increase is gated, and not by approval alone. Section 183(2) allows one only in the event of unforeseen circumstances, and then only with the approval of a majority in value of the notified creditors or of the Accountant in Bankruptcy.
A commercial provider may charge, and there is no cap on what it may charge.
The charities charge nothing at all, and whether plans are free or charge fees sets out where the money comes from instead.
And you can have trust deed fees looked at
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, at any time before the final distribution of the estate among the creditors.
Section 183(6) puts anyone who advised you before the deed was granted behind the creditors in the order of payment.
How much of the debt is written off, and how long does each last?
A plan writes off nothing. A trust deed writes off whatever is unpaid at discharge, and nobody can promise a percentage at the outset.
The honest position on a trust deed
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.
Across every protected trust deed in Scotland in 2025-26, including those that paid nothing at all, creditors received a mean of 18.1 pence for every pound they were owed, up from 16.3 pence the year before. That is an average across thousands of cases and not a forecast of yours.
A plan repays the balances in full
The only route to paying less on a plan is a full and final settlement, and every creditor has to agree to that separately in writing.
Any page telling you a plan writes debt off after a fixed period is describing a different solution. What happens when a plan ends sets out the real ending.
Length
A trust deed normally runs 48 months of contributions. A plan runs until the balances are cleared, which depends on the debt, the payment and whether interest was frozen.
A plan of ten years or more is not unusual where interest has kept running, and when to move to a statutory solution covers the signals worth acting on.
What becomes public, and what shows on your credit file?
A trust deed is on a public register and a plan is on nothing. On the credit file the difference is smaller than most pages suggest.
The register
A protected trust deed appears on the Register of Insolvencies, which the Accountant in Bankruptcy keeps and anyone may inspect.
A debt management plan appears on no register anywhere, which whether your trust deed appears on the Register of Insolvencies sets against the formal side.
The credit file claim to be careful with
Pages comparing the two often say both stay on your file for six years. That is wrong about a plan, because StepChange says nowhere in your credit report shows you are on one.
What is recorded on a plan is the state of each account, which would be recorded anyway. Whether a plan affects your credit score goes through it, and how long a trust deed stays on your credit file deals with the other side.
Borrowing during each
Nothing in law restricts credit while a plan runs, and nothing prescribes what a provider’s contract may say about it. Read the contract you signed, which CONC 8.4.1, a rule, requires you to have in writing.
Getting a mortgage on a plan covers what is and is not known about lending decisions.
Which questions should you answer before you choose?
Four of them, and a money adviser can work through all four in one appointment. None of them is about which product sounds better.
The four
- What is the house worth, and what is left on the mortgage?
- Can you clear the balances in a period you can live with?
- Is anything already being enforced against you?
- Are your total debts at least £5,000, and is your income steady?
Equity is the decider more often than not
Little or no equity removes the trust deed’s main drawback for a homeowner. Real equity makes it the thing to think hardest about.
National Debtline’s Scottish trust deed guide is a free starting point, and what a trust deed costs sets out the money side.
And there is a third option on this ground
A debt payment programme under the Debt Arrangement Scheme freezes interest and recalls an arrestment without putting your equity in issue, which is why it is worth asking about first.
Sequestration sits at the far end of the same scale, and the difference between a plan and sequestration sets that out.
Frequently asked questions
Will a debt management plan put my house at risk?
Not by itself. A plan covers unsecured debts, leaves your title untouched and appoints nobody over your property, though it also gives you no protection from a creditor enforcing.
Does a trust deed always mean losing the house?
No, and it does mean the equity has to be dealt with. How that is done depends on how much equity there is and what your trustee agrees.
How much debt do you need for a trust deed?
At least £5,000 including interest at the date you grant the deed, under section 164(3) of the Bankruptcy (Scotland) Act 2016, in force since 30 November 2016. A debt management plan has no minimum at all.
Do creditors have to agree to a trust deed?
Not positively. Creditors are deemed to accede unless a majority in number or no fewer than one third in value object in writing within five weeks of registration of the notice.
Which one stops a wage arrestment?
The trust deed. Section 173 ends an earnings arrestment on the date of protection, and a debt management plan has no effect on diligence at all.
Do both show on my credit file for six years?
No. A protected trust deed is an insolvency entry, while a plan is not recorded as an entry at all, and only the individual accounts inside it are reported.
How much would a trust deed write off?
Nobody can honestly say at the outset. Across every protected trust deed in Scotland in 2025-26, including those paying nothing, creditors received a mean of 18.1 pence in the pound.
Is there an option that protects me without touching my equity?
A debt payment programme under the Debt Arrangement Scheme freezes interest and charges, recalls an arrestment of your income or property, and does not convey your estate to anyone.
Related guides
- What Is The Difference Between A Trust Deed And A Debt Management Plan? Which one binds your creditors, what each costs, who regulates them, what reaches a public register, and when a plan is the better fit.
- Will You Lose Your Home In A Trust Deed? Whether your home passes to the trustee, how a property with little equity can be kept out, why the timing matters, and when a sale can be forced.
- What Happens To The Equity In Your Home In A Trust Deed? How equity is measured on the day you sign, what a section 175 agreement asks of you, what unfreezes the figure, and how joint ownership is treated.
- Can You Get A Mortgage While You Are On A Debt Management Plan? What a lender sees on your file, what the affordability rules require it to check, and how long the entries last once the plan ends.
- Does A Debt Management Plan Affect Your Credit Score? Why the plan itself never appears, which markers creditors add to the accounts, how long they last, and what happens once the plan ends.
- When Should You Move From A Debt Management Plan To A Statutory Debt Solution? The signs a plan has stopped working, what a statutory route can do that an informal one cannot, and which fits which situation in Scotland.
- What Is The Difference Between A Debt Management Plan And Sequestration? What each one is in law, whether the debt is repaid or written off, what happens to your home and car, and how long each lasts.
- How Long Does A Trust Deed Stay On Your Credit File? When the six years start and finish, why the date you granted the deed matters more than discharge, and how the entry differs from the public register.
- 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 Is A Debt Management Plan? What informal means in practice, which debts go in, what happens to interest and creditor contact, and what a plan cannot do in Scotland.
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.