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Protected Trust Deeds (PTD's)

Living in Scotland with debts of £7,000 or more?
A Trust Deed could help clear your unsecured Debts.

Debt free in a set time (usually four years)

All interest and charges get frozen

Stop all creditor harassment

IVA's

Helping you out of serious debt problems

A Protected Trust Deed (PTD) is a legal process accessible to residents of Scotland only, by which you can gain protection from your unsecured creditors by entering into a legally binding repayment agreement with them, which is then supervised by a licensed insolvency practitioner.

All debts included into an PTD will be looked to be cleared in a set time frame which is usually 4 years. Any outstanding balances at the end of the PTD agreement period will then be written off leaving you only with debts that couldnt be included in the PTD to pay(such as secured debts) or no debts at all.


How does an PTD work?

A Trust Deed transfers your assets to a trustee or IP who can sell them to pay your creditors. Your Insolvency Practitioner will look at your debts, income and outgoings to work out how much you can realistically afford to pay your creditors each month. They will then create a repayment proposal for your creditors to consider. The proposal must be fair and reasonable from your creditors’ viewpoint. If more than half of your creditors in number or those accounting for one third or more of your debt do not agree to the terms of the trust deed, it will not go ahead or be protected.



Advantages

Here are some of the key advantages with using a Protected Trust Deed.

Write off some of your unsecured debts

Advantage

Become debt free in a set time frame (usually 4 years)

Advantage

Cease creditor harassment

Advantage

All interest and charges will be frozen

Advantage


Disadvantages

Only unsecured debts can be included

Disadvantage

If your PTD fails, you could be made bankrupt

Disadvantage

Will affect your credit rating

Disadvantage

Full disclosure

Disadvantage

You may be required to release equity from your home


More details you should know about PTD's

Will an PTD affect my home?

If you are a homeowner, you will normally be required to release any equity you have in your property(s) by taking out a remortgage or secured loan and paying this money to your creditors. A re-mortgage may attract higher interest rates or may not be available and cause payments into the PTD to be extended for a further 12 months.

Once your creditors have agreed a PTD, all interest and charges on your unsecured debts will be frozen. There will be restrictions on your expenditure once you enter a PTD and you will be unable to obtain any unsecured credit for the duration of your PTD. Your credit rating will be adversely affected for up to six years from the start date of your PTD.


What else should I know about PTDs?

PTDs can only include unsecured debts meaning any secured debts or priority debts will have to be continued to be paid by the debtor. As you are currently experiencing difficulties paying your debts, your credit rating is likely to have been affected already and entering any further PTD or Debt plans could affect your rating further.

Your credit companies will want to register the missed payments that are not being paid, as a default of payment. This will almost certainly stop you from obtaining further credit whilst the credit that you already have with them is being paid.


How Do I Qualify for an PTD?
  • You must live in Scotland
  • You must have a monthly disposable income of £100 or more
  • You must have unsecured debts of £7,000 or more
  • You must have 2 or more different creditors

There are other qualifying criteria to consider such as the type of income you receive, your property situation and you must be insolvent (meaning your debt is greater than your assets). A PTD advisor will go through all the qualifying criteria with you should you wish to proceed with a PTD