What is a Protected Trust Deed?
A Trust Deed, is a voluntary but formal arrangement available to residents of Scotland. Your chosen Insolvency Practitioner/PTD company helps you to prepare an offer to your creditors, detailing the amount you can realistically afford to repay over an agreed period of time, typically four years. If your creditors agree, the Trust Deed becomes a Protected Trust Deed at this point.
- All of your included debts will be consolidated into one monthly payment.
- Your monthly payment is based on your own financial circumstances to ensure this remains affordable for you and your situation.
- Included creditors are no longer able to contact you regarding debt repayment.
- You are legally protected from action being taken against you by included creditors.
- There are no upfront fees; fees are incorporated into your monthly payments.
- If you’re a homeowner, you may be asked to try and re-mortgage during your PTD, which may result in a higher interest rate. If you cannot remortgage, you may be asked to extend your PTD instead.
- Failure to keep up with PTD repayments could lead to bankruptcy.
- Your PTD will appear on a public insolvency register.
- There are restrictions on the expenditure of a person who enters into an PTD
- A PTD is subject to the approval of the majority (by value) of your creditors; they do not have to agree.
- Only the balances of debts included in your PTD will be written off on successful completion, any debts you have outside of your PTD will remain outstanding
- Entering a PTD can have a severe impact on your credit rating.