PTD

Protected Trust Deed

(available in Scotland only)

PTD

 

A Trust Deed is a formal and legally binding arrangement between an individual and their creditors that lasts for a period of 4 years.

A Trust Deed is only available to individuals who are residents of Scotland, and have lived in Scotland for at least six months prior to their application.
It is a legal agreement which can only be carried out through a licensed Insolvency Practitioner.

A Trust Deed is entered into when the value of debt is significant and the individual is finding it increasingly difficult to pay their creditors.

Any debts remaining at the end of the normal four-year Trust Deed period, subject to exception, are effectively written off by Creditors*. If the proposal is accepted, then the Trust Deed becomes a Protected Trust Deed and creditors can no longer take legal action to recover their debts and are bound by the terms of the Trust Deed. Creditors do not need to approve a Trust Deed.

Once all payments have been made, normally over 48 months, and all terms have been complied with, a discharge letter will be issued. At this point the individual will no longer be liable to repay their debts that were included in the Trust Deed.

A Trust Deed is a legally binding contract therefore the client cannot cancel their agreement once they have signed the Trust Deed.

YOU CAN APPLY FOR A PTD IF:

  • You are a Scottish resident only.
  • You are struggling with over £5000 of qualifying unsecured debt.
  • Have 2 or more creditors
  • You must have an income that isn’t solely benefits

MAIN ADVANTAGES AND DISADVANTAGES:

ADVANTANGES:

  • A PTD offers you legal protection from your included creditors.
  • A PTD usually has a fixed term of 4 years, and at the end of the arrangement, any outstanding balances on included debts will be written off.
  • You make one monthly payment towards all your included debt.
  • The payment you make into a PTD is based on your income and expenditure, so should always be affordable to you.
  • There are no upfront fees as they are usually incorporated in to your agreed monthly payments.
  • Interest and charges on included debts will be frozen and creditors cannot legally contact you about payment, they can only send you your regular statements.

DISADVANTANGES:

  • It is important that you keep up to date with your payments and all requirements as failure to do so may result in your creditors filing for bankruptcy.
  • Any debts not bound by your PTD will remain outstanding.
  • Your credit file will be affected for a period of 6 years, starting when the PTD is approved. Your ability to source credit will be affected and you will be unable to source credit during your PTD without the permission of your Trustee.
  • A PTD can impact on certain jobs, such as those in finance and the Civil Service. We would always suggest that you check your employment contract if a Protected Trust Deed is a solution you are considering.
  • If you are a homeowner and you have equity in your property you may be required to release equity from the value of your home to pay off debts towards the end of your PTD. You may find it hard to remortgage as an PTD has a negative effect on your credit rating and remortgaging at that point may attract higher interest rates therefore if no remortgage is available, your PTD will be extended up to the value of equity.
  • Restrictions on your expenditure.
  • You will be added to a public register of insolvencies.
  • If a PTD fails, interest can be re applied to the debts.
*All debt solutions including debt write off are based on your personal financial circumstances and are subject to creditor approval, acceptance and eligibility

Freephone 0800 009 6211

100% CONFIDENTIAL

Consumer Information Service only gives advice, we do not provide any debt solutions and we do not charge for our advice. If during our conversation with you and after discussing the options that are available to your personal situation you decide a debt solution is the most appropriate option for you, then we offer a no obligation referral to carefully selected debt solution providers for which we may receive a referral fee.

Some debt solutions involve fees to you. These fees will always be explained to you and can differ depending on your circumstance. Any fees will be confirmed in writing from the debt solution provider before any agreements are signed.

Consumer Information Service is a trading name of Consumer Claims Service Ltd, registered in England and Wales, Company Number 9703609. Registered Address Fernhills Business Centre, Foerster Chambers, Todd Street, Greater Manchester, United Kingdom BL9 5BJ. Data Protection Registration Number: ZA145229 Consumer Information Service is an Appointed Representative of Debt Help Ltd authorised and regulated by the Financial Conduct Authority 782878. 

The following information about dealing with creditors is available from the Government:

ENGLAND & WALES      NORTHERN IRELAND        SCOTLAND   

COMPLAINTS POLICY     PRIVACY POLICY        COOKIES