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.

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 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.

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.

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

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.

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

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.

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.

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.

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.