A Protected Trust Deed (PTD) is a legal process available only to residents in Scotland which offers debtors an alternative to bankruptcy (Sequestration)
A Protected Trust Deed (PTD) is designed to enable those who cannot repay their debts a way to establish, a monthly repayment schedule based on what the debtor can afford to pay. The Protected Trust Deed (PTD) will last for a specified period, usually three years. When the specified term of the arrangement comes to an end, any remaining debts are written off. |
How does a Trust Protected Deed (PTD) work?
The Trust Protected Deed (PTD) is a way for people to repay their debt at a set monthly figure until the agreement has finished, Agreements normally last 3 years. The Protected Trust Deed is supervised by a licensed insolvency practitioner, who is responsible for all negotiations with your creditors and who is also responsible for ensuring that you keep to the terms of the Trust Deed. |
Steps to setting up a Protected Trust Deed (PTD)
- Step One – One of our experienced Debt Advisors will complete a full fact find to determine exactly how much you can afford to pay towards your Protected Trust Deed (PTD) and they will see if a Protected Trust Deed (PTD) is the best debt solution for you.
- Step Two – Once we know that a Protected Trust Deed (PTD) is the best debt solution for you, we will collate all information and get all the paperwork for you to read and sign, it must be returned asap so the Protected Trust Deed (PTD) process can start.
- Step Three – Once you have returned all the relevant signed documentation, an insolvency practitioner will look at you case and start putting together your Protected Trust Deed (PTD) proposal. Once you Protected Trust Deed (PTD) has been accepted, you will start to make monthly contributions for a set period of time (normally 36 months).
- Step Four – on your 36th Protected Trust Deed (PTD) payment, you will be discharged and totally debt free.
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Advantages of a Protected Trust Deed (PTD)
- The trustee handles all correspondence from creditors, therefore relieving the pressure of debt.
- A Protected Trust Deed (PTD) is usually more flexible and costs less to administer than bankruptcy (sequestration).
- With a Protected Trust Deed (PTD), your creditors will be unable to add further interest, charges, or take any further action against you.
- You will in most cases still be able to hold certain public offices.
- You will in most cases still be able to remain self-employed and continue to serve as a director of a company.
- Protected Trust Deeds (PTD) normally last 3 years, after which any remaining debt will effectively be written off.
- Information about the Protected Trust Deed is not published unlike bankruptcy (sequestration).
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Disadvantages of a Protected Trust Deed (PTD)
- Existing arrestment’s and other diligence continue to be effective. It should be noted that Councils who carry out earnings arrestment will generally lift arrestment’s upon protection of the Trust Deed.
- You cannot be a company director of a limited company unless the company’s Article of Association state otherwise.
- The arrangement is binding on you as well as your creditors. If you were to default on the arrangement then the Insolvency Practitioner can petition for your bankruptcy (Sequestration)
- Entering into any arrangement with your creditors may affect your credit rating.
- Creditors are not obliged to accept a proposal for a Trust Deed. However, the Trustee will negotiate with all your creditors. Unless creditors, who are owed more than one third of the total debt object (which is extremely rare), the Trust Deed will become protected.
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| Protected Trust Deeds (PTDs) Frequently Asked Questions |
How long does it take to set-up a Protected Trust Deed (PTD)?
A Protected Trust Deed (PTD) normally takes between 6/8 weeks to set up. If you would like to speak to one of our experienced debt advisors about a Protected Trust Deed (PTD) call our free phone debt helpline on 0800 692 2000 or take our Debt Test. |
Will I lose my house if I enter into a Protected Trust Deed (PTD)?
No, you will not loose your house in a Protected Trust Deed (PTD), but if you have equity in your property, then this will be taken into account and you may need to release this equity to help pay your creditors. If the property is joint-owned, then an appropriate amount of the equity will be taken into consideration, not the whole amount. |
What if my financial situation changes whilst in a Protected Trust Deed (PTD)?
Under a Protected Trust Deed (PTD), you have to inform your Trustee of any changes in your financial circumstances, either good or bad. If your income is reduced, the Trustee will propose a variation on the terms of the Trust Deed to reflect your new circumstances. If your income is increased, then the Trustee may propose other variations. Our professional debt advisors are happy to give and debt advice or help surrounding a Protected Trust Deed (PTD). |
Can a Protected Trust Deed (PTD) be cancelled?
No, a Protected Trust Deed (PTD) cannot be cancelled |
Is anybody able to find out that I'm in a Protected Trust Deed (PTD)?
No, a Protected Trust Deed (PTD) is completely confidential. No details are published, unlike bankruptcy, so no-one will know unless you decide to tell them. |
Do I have to notify my partner, family or my employer about my Protected Trust Deed (PTD)?
You may have to inform your Family or Employer, if the Protected Trust Deed (PTD) effects them or your employment. |
I own a business, will a Protected Trust Deed (PTD) mean I have to close it?
No, unlike bankruptcy you will not have to give up your business or directorship in a Protected Trust Deed (PTD). |
How long does a Protected Trust Deed (PTD) last?
A Protected Trust Deed (PTD) has a set time scale, normally 36 months, your insolvency practitioner will cover this with you |
Is a Protected Trust Deed (PTD) the right solution to solve my debt problems?
A Protected Trust Deed (PTD) is not the best solution for everyone and strict criteria must be adhered to when applying for a trust deed. Our experienced debt advisors with give you all the information you require on Protected Trust Deeds (PTDs). Call our free phone debt helpline on
0800 692 2000 or take our Debt Test. |
Why have I heard lots of things about IVAs (Individual Voluntary Arrangements)?
A Protected Trust Deed (PTD) is simply the Scottish version of an Individual Voluntary Arrangement (IVA), but there are a few differences. Our experienced debt advisors will discuss this with you |
Is a Protected Trust Deed (PTD) another name for bankruptcy/sequestration?
No, a Protected Trust Deed (PTD) is a less formal process than sequestration (bankruptcy). |
What happens if I can't keep up payments on my Protected Trust Deed (PTD)?
It is very important that you keep up to date with your Protected Trust Deed (PTD) payments, if you fall into arrears you may be made bankrupt. If you are struggling with you payments then inform you insolvency practitioner (IP) straight away |
What happens at the end of the Protected Trust Deed (PTD)?
Any remaining debt will be written off and you will be free from debt. |
Is all debt covered by the Protected Trust Deed (PTD)?
Your Protected Trust Deed (PTD) will cover any unsecured debt and arrears, such as unsecured loans, credit cards and rent arrears. It will not cover mortgages, or any loans secured against an asset. |
Which creditors can be included in a Protected Trust Deed (PTD)?
You can only include unsecured debts on a Protected Trust Deed (PTD), such as Credit / Store Cards, Overdrafts, Unsecured Loans and Catalogues. Our experienced Protected Trust Deed (PTD) advisors will complete a full fact find with you, to ensure a Protected Trust Deed (PTD) will work for you. |
Do creditors have to accept the terms of the Protected Trust Deed (PTD)?
Two thirds or more of your creditors by value of debt MUST agree to the proposals for the Trust Deed to be classed as protected. If they don't, the Trust Deed can still go ahead but you will not be protected from further interest or recovery action. |
Can a single creditor refuse the Protected Trust Deed (PTD) and stop it progressing?
Yes , but only if that debt counts to a third or more of the debt value, you Protected Trust Deed (PTD) advisor will discuss this with you. |
Will I be protected from further recovery action, charges and interest on a Protected Trust Deed (PTD)?
If the Trust Deed becomes a Protected Trust Deed (PTD), your creditors will be prevented, under law, from taking any further action against you. This includes no more additional charges, and all interest will be frozen. |
What happens if the Protected Trust Deed (PTD) is not approved?
There are different debt solutions to a Protected Trust Deed (PTD) if the Trust Deed fails. Our debt advisors will cover all other debt solutions available. Call and speak to one of our debt advisors on our free phone debt helpline 0800 692 2000 or take our Debt Test.
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We hope this information has helped, A Protected Trust Deed (PTD) is a very good option to resolve your debt problems and become debt free. |
| Call Your Debts Cleared free on 0800 692 2000 or Take our online DEBT TEST |
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