A Protected Trust Deed is a legal process accessible only to residents in Scotland and it offers debtors an alternative to bankruptcy.

A Trust Deed enables those who are unable to repay their debts a way of establishing a monthly repayment schedule based on what the debtor can afford to pay. The Trust Deed will last for a specified period which is usually three years. When this specified term of the arrangement comes to an end, any remaining debts are written off.

How does a Trust Deed work?

Your protected trust deed is supervised by a licensed insolvency practitioner. The practitioner is responsible for all negotiations with your creditors and also for ensuring that you keep to the terms of the Trust Deed.

Alternative Debt Solutions

Trust Deeds.co.uk also offer Debt Management Programs. Debt management enables you to pay one single lower monthly payment to all your unsecured credit companies. This removes the stress and worry of day-to-day dealing with your creditors.

Once a regular pattern of monthly payments is being paid to your creditors via our company, they will be happy to deal directly with us. In turn, we will negotiate to freeze the interest and charges on your accounts

Advantages of a Protected Trust Deed

• The trustee handles all correspondence from creditors, thus the pressure and stress of debt is relieved.
• A Protected Trust Deed costs less to administer than sequestration (bankruptcy) and is usually more flexible.
• A Protected Trust Deed prevents your creditors from adding further interest, charges, and from taking any further action against you.
• You will still be able to hold certain public offices in most cases.
• You will in most situations be able to remain self-employed and continue to serve as a director of a company.
• Protected Trust Deeds generally last 3 years, after which any remaining debt will effectively be written off.
• Information about the Protected Trust Deed is not published unlike sequestration (bankruptcy).
  

Disadvantages of a Trust Deed

• Existing arrestments and other diligence continue to be effective. It should be noted that Councils who carry out earnings arrestments will generally lift arrestments 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 Sequestration (bankruptcy)
• 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.
  

If you would like more information about our Trust deeds then please click here