Protected Trust Deeds (Scotland)

Being in debt can significantly affect the quality of your life. However, there are debt solutions that can help you relieve some of your burden and Protected Trust Deeds (PTD) is one of them.

A Protected Trust Deed is the Scottish equivalent to an IVA (Individual Voluntary Arrangement) in England and Wales. It is a legally binding arrangement reached between you and your creditors through a Trustee for the reduction in the amount of debt to be paid over a period of time, which is usually three years.

A Protected Trust Deed is a better alternative to sequestration (bankruptcy) and is designed to help those who have some regular disposable income to pay their monthly instalments. Monthly payments are based on what you can afford.  

A Protected Trust Deed is legally binding but there is no court involvement in setting up the process.

How Trust Deeds work?

  • The Trustee would put together a form of proposal based on the information you provide about your creditors, the amount you owe and what you can afford to pay each month.
  • Once you approve of the proposal, the Trustee would then approach the lenders for their approval. For a Protected Trust Deed to become applicable, two or three creditors by value must vote in its favour. As part of the arrangement all further interest and charges are frozen.
  • The deed can then be registered in court as a Protected Trust Deed. This prevents your creditors from taking any legal action against you.
  • A Protected Trust Deed is usually for three years. At the end of this period, all remaining debt is written off and you can then make a fresh start.



Advantages of Trust Deeds

A Protected Trust Deed is a better alternative to sequestration (bankruptcy) and offers the following advantages:

  • It eases the pressure from creditors as the Trustee deal with all correspondence and queries.
  • Companies may continue to trade and individuals can retain their directorships.
  • Monthly payments are based on what you can comfortably pay.
  • At the end of the 36 months period, all remaining debt is written off.
  • Unlike bankruptcy, a Trust Deed is not made public.
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