A Protected Trust Deed, or PTD, is a formal debt solution available only to people living in Scotland, which forms part of the Bankruptcy Scotland Act of 1985, amended April 2008.
Also referred to as the Scottish IVA - Protected Trust Deeds act as an alternative to Bankruptcy.
To qualify for a Protected Trust Deed you need to have;
It is for good reason that Protected Trust Deeds are referred to as Scottish IVA's as the two solutions have many similarities. Both debt solutions are structured around repayments based on affordability and they both last for a fixed term, though in the case of a Protected Trust Deed the term is set to just 4 years.
Once the Protected Trust Deed has been agreed with creditors there is a guarantee to freeze interest and creditors are forced to stop any legal action.
Payments into a Protected Trust Deed are based on affordability and will vary from case to case.
As with an IVA, a Protected Trust Deed can only be set up and administered by a licensed Insolvency Practitioner and he his role is to ensure that both parties adhere to their legal obligations outlined under the terms of the Protected Trust Deed.
The application process of a Protected Trust Deed is very quick in comparison to an IVA, and in most cases a Trust Deed will become Protected within 5 weeks of the initial Trust Deed being signed.
Becoming 'Protected' is the phrase used to define the point at which creditors are legally bound by the original Trust Deed. For the Protected Trust Deed to become legally binding on all creditors there needs less than 33% rejection from the creditors, in debt value terms, or no more than half, numerically speaking.
As part of the Protected Trust Deed process the applicant will have to pass ownership of all his assets to the Insolvency Practitioner, who acts as the Trustee for the duration of the Trust Deed.
The Trustee's role is to ensure the applicant repays as much of his debt as possible through the Trust Deed, and if the applicant is a homeowner, this will including dealing with any equity in the applicant's property.
Yet again, as with an English IVA, Scottish Protected Trust Deeds will write-off any unpaid outstanding unsecured debts when it reaches a successful conclusion.
If you would like to discuss how a Protected Trust Deed may be able to help you with your debts, then just call our helpline on 0800 856 8569, where one of our advisers will be able to explain exactly how a Protected Trust Deed will impact on your personal circumstances.