Remortgaging while you are in a protected trust deed is generally only possible with your trustee’s agreement, because the trust deed gives your trustee an interest in dealing with your affairs, including your home, for the benefit of your creditors. A protected trust deed usually runs for around 4 years, and many include a clause asking you to try to release equity from your home during that time.
This page looks at what your trust deed says about your home, how the trustee’s agreement works in practice, and what tends to happen once you are discharged. For the wider picture of remortgaging in Scotland, including sequestration, court decrees and the Debt Arrangement Scheme, see our Scotland page.
On this page
This page covers
In short
- A protected trust deed usually runs for around 4 years, sometimes longer if you own valuable property.
- Many trust deeds include a clause asking you to try to release equity from your home, often through a remortgage.
- Any money released is generally paid to your trustee for your creditors, not kept by you.
- Once discharged, the trust deed is recorded on the Register of Insolvencies for a further 12 months.
Your home may be repossessed if you do not keep up repayments on your mortgage. Think carefully before securing other debts against your home. Borrowing over a longer term can mean paying back more in total.
What does your trust deed say about your home?
A trust deed becomes protected once enough creditors accept its terms, and individual creditors then generally lose the right to chase you separately over the debts it covers. What happens to your home depends on the terms you agreed. Some trust deeds exclude the family home entirely; others include a clause asking you to try to release equity, often near the end of the arrangement.
| If you have equity to release | What tends to happen |
|---|---|
| Enough equity, and a lender will consider you | You are usually asked to remortgage or take a further advance, with the money paid to your trustee. |
| Some equity, but a remortgage is not possible | Some trust deeds allow a fixed sum to be added to what you owe at the end instead. Check your own trust deed. |
| Little or no equity | Your trustee may not ask you to do anything with your home at all. |
General patterns only. Your own trust deed sets out what applies to you, so check it with your trustee.
Getting your trustee’s agreement to remortgage
Because your trustee has an interest in your financial affairs while the trust deed runs, a remortgage generally needs their written agreement before you apply. Many trustees will want to see the likely amount you could release and which lender is being approached before they agree to it.
This is broadly similar to the position for someone remortgaging after an IVA or to pay off an IVA, although a protected trust deed follows Scots law and your own trust deed’s wording, not IVA rules.
What a trustee is likely to ask for
- A recent valuation or estimate of your home’s value
- Details of your current mortgage balance and any early repayment charges
- The name of the lender or adviser you plan to approach
- How the released funds will be paid to the trust deed
What if a remortgage or further advance is not possible?
Not everyone in a protected trust deed will be able to remortgage. Adverse credit, low equity, or the value of the property may all mean no lender is willing to release money at that time. This does not automatically mean the trust deed fails. Many trust deeds set out what happens if equity cannot be released, such as adding a fixed sum to the amount you owe, and your trustee should be able to explain what your own trust deed says.
A trustee can refuse to discharge you if the agreed conditions, including any equity clause, are not met, and in some cases creditors can pursue you again with interest and charges added back. If you are struggling to meet a condition, speak to your trustee as early as possible rather than waiting.
After your trust deed is discharged
Once you have met the agreed conditions, your trustee applies to have you discharged and the remaining unsecured debts are written off. Discharge is recorded on the Register of Insolvencies for a further 12 months, and the trust deed itself generally stays on your credit file for 6 years from when it started, much as an IVA does elsewhere in the UK.
After that, remortgaging works much as it does for anyone with a past insolvency: how long ago it was, whether mortgage payments stayed on track, and your record since. Our page on remortgaging after a completed IVA covers similar timing questions, though a trust deed is not the same arrangement.
To check that your own trustee is a properly licensed insolvency practitioner, you can search the register at Trust Online.
What may affect a remortgage during or after a protected trust deed
| Factor | Why it matters |
|---|---|
| Whether the trust deed is still active | An active trust deed usually needs the trustee’s written agreement before you apply. |
| What your trust deed says about your home | Some trust deeds exclude the home, others include an equity clause. Check your own paperwork. |
| Equity and loan to value | How much equity you have shapes whether releasing money is realistic at all. |
| Time since discharge | Choice of lender tends to widen the longer it has been since you were discharged. |
| Mortgage payment history | Keeping your mortgage up to date throughout the trust deed is usually viewed favourably. |
| Other entries on your file | Defaults or missed payments from before the trust deed follow their own 6-year timings. |
| Income and affordability | Contributions to the trust deed count as an outgoing while it runs. |
| Lending on Scottish property | Check that any lender considered actually lends on property in Scotland. |
These are general points, not lender rules. Each lender sets and changes its own criteria.
Information an adviser may ask for
You don’t need all of this to make an enquiry. It helps to know where to find it, because an adviser is likely to ask about most of it.
- Your trust deed start date, expected end date and a copy of the terms
- Your trustee’s written agreement to a remortgage, if the trust deed is still active
- Your discharge certificate, if the trust deed has ended
- Credit reports from Experian, Equifax and TransUnion
- Your current mortgage balance, deal end date and any early repayment charges
- Proof of income and a summary of your monthly outgoings
- An estimate of your home’s value
Frequently asked questions
Can I remortgage without telling my trustee?
No. While a trust deed is protected, your trustee has an interest in your financial affairs, and granting a new mortgage over your home generally needs their written agreement first. Applying without it could put your discharge at risk.
Do I keep the money if I remortgage during my trust deed?
Usually not. Money released is normally paid to your trustee for the benefit of your creditors, as part of meeting the terms of your trust deed, rather than kept by you.
What happens if no lender will remortgage me during my trust deed?
Many trust deeds set out an alternative, such as adding a fixed sum to the total you owe, if equity cannot be released. Ask your trustee what your own trust deed says applies to you.
How long does a protected trust deed stay on my credit file?
Generally 6 years from when it started, even if the trust deed itself completes sooner. The Register of Insolvencies entry is different again, and is usually removed 12 months after discharge.