Protected Trust Deeds (PTD)

If you live in Scotland and have unsecured debts which you are struggling to pay, a Trust Deed could be an appropriate solution.

Unlike the more informal debt management plan, a Trust Deed is a legally binding contract between you and your creditors. Firstly, we’ll assist you in assessing what you can realistically afford to repay on your outstanding debt and help you to avoid bankruptcy.

The Trust Deed will then be administered on your behalf by your Trustee who must be a Licensed Insolvency Practitioner (IP). They will assess your situation and approach your creditors with your proposal.

Provided certain conditions are met, the Trust Deed may be registered as 'protected' thereby preventing creditors from petitioning for your sequestration or taking any other steps to recover debts due to them. Your Trust Deed will then become a Protected Trust Deed (PTD).

Once accepted, you will pay what you can realistically afford each month, over a period of typically three years, but could be longer depending on your circumstances. You make a single monthly repayment to your Trustee. At the end of the term, any amount left unpaid against the original amount will be written off by your creditors. All assets and liabilities have to be declared. You may be required to release any equity in your property and assets of a large value may be realised.

The agreement is legally binding to all parties. This offers you protection from additional interest and charges but you must be sure that you can keep up with the repayments. This kind of financial first aid is a private process, unlike bankruptcy. If you work in a profession where being bankrupt can lead to you being dismissed, a PTD may not put your job at risk.

You should however consider all implications before you enter into an agreement.

Taking the First Step

If you think that this could be the right debt solution for you, one of our professional debt advisors will contact you to discuss your circumstances and make a debt diagnosis to see if this is the best option for you. We’ll also try to establish the cause of your debt problems and do what we can to address those issues. We’ll collate all the relevant evidence about your financial health and circumstances before passing to an IP to draw up your proposal.

During this time, your Trustee will draw up the proposal, organise signatures and distribute the relevant documentation. However, once you’ve outlined your circumstances and provided any supporting documentation, they’ll do the majority of the work for you. You’ll just need to carefully read and sign any documentation.

Upon receiving your signed documentation, your Trustee will contact all of your creditors where they will be asked to accept your proposal.

There’s no guarantee that your proposal will be accepted but a Licensed Insolvency Practitioner has the experience to propose a Trust Deed that stands a good chance of success.

Providing you keep up with the repayment schedule of your PTD, you will be completely discharged of any liabilities to your creditors.

Please contact us if you wish to find out more about a PTD or ask a Debt Solver advisor for confidential, professional debt advice, and to get a debt health check up.