Protected Trust Deeds (PTD) - Pros and Cons

Trust Deed - Pros

• Debt free in a set time (normally 3 Years)
• Interest and charges are frozen, for the term of the trust deed
• Monthly payments are based your Disposable Income (What you can Afford)
• No upfront fees
• No more creditor contact i.e. letters, phone calls, etc
• Avoid all of the stigma of bankruptcy
• Legal action and collection action will stop, by law
• Removal of the temptation to get further into debt

Trust Deed - Cons

• In order for the Protected Trust Deed (PTD) to be agreed, you require a third in value of the unsecured creditors to vote for your Protected Trust Deed (PTD)
• Your home and assets may still be at risk
• You will not be able to use your existing credit cards, store cards or catalogues
• You will normally not be allowed to borrow any more unsecured money until you have successfully completed the protected trust deed (PTD)
• If you do not maintain your monthly payments to the Protected Trust Deed (PTD) then your creditors have no other option but to look at sequestrated
• (bankrupt)

What are the Pros and Cons of Debt Management Plans (DMP)?

Debt management Plan (DMP) – Pros and Cons

Debt Management Plan - Pros

• A Debt management Plan may see your interest and charges being frozen by your creditors
• Debt Management Plans are Informal, Unlike Protected Trust Deeds (PTD)
• One Affordable Monthly Payment
• Debt management Plans can provide relief from the stresses of debt
• Debt management plans will not effect your credit rating as much as other debt solutions like Protected Trust Deeds (PTD)

Debt management disadvantages

• Debt management is not a legally binding agreement unlike a Protected Trust Deed (PTD)
• Your creditors are under no obligation to agree to freeze interest and charges
• It will take you longer to repay all of your debts
• Your credit rating may be affected
• Your creditors are free to take further legal action, unlike a Protected Trust Deed (PTD)