Protected Trust Deed
Often referred to as the Scottish IVA, the Protected Trust Deed, or PTD, is a formidable weapon in the arsenal against personal debt in Scotland.
Introduced under the Bankruptcy Scotland Act 1985, amended in April 2008, the Protected Trust Deed solution acts as a formal alternative to those people living in Scotland who want to avoid bankruptcy.
Protected Trust Deed Qualifying Criteria
Whilst there's no stipulated minimum debt level, it's generally accepted that a Protected Trust Deed only becomes a viable solution with debt levels above £10,000.
A PTD applicant can be self-employed or employed and a PTD is available to homeowners, tenants and lodgers. Even people living with family or friends can apply.
The payments into a PTD are based on affordability, but there's a minimum payment ratio that must be met if the PTD application is to be successful. Essentially, the more you owe, the more you'll be expected to repay.
Protected Trust Deed advantages
A PTD is designed to help people living in Scotland regain control over their unsecured debt problems whilst avoiding bankruptcy or, as it is also know in Scotland, sequestration.
Based on a structure of affordable repayments paid over a fixed period of usually 4 years, a Trust Deed gives the applicant the chance to prioritise their essential living costs over the cost of their debt repayments.
The Protected Trust Deed guarantees a freeze on all interest and late payment charges, whilst stopping any legal action being taken against the applicant for the recovery of the debt.
After completion of the fixed period, the Trust Deed completes and any outstanding balances are written-off. As a result, it's not unusual to see substantial debt write-offs of around 80% - 90% with a Protected Trust Deed.
Protected Trust Deed disadvantages
A Protected Trust Deed will have an impact on the applicant's credit rating for a period of 6 years and their name will be included on the register of insolvencies.
Insolvency laws state that a Protected Trust Deed must be administered by a licensed Insolvency Practitioner and, when appointed, they take on the role of the Trustee.
It's the Trustee job to make sure as much debt as possible is recovered for the creditors, which puts the Trustee in a very powerful position.
The trustee has the power to begin bankruptcy action if they feel the debtor is being uncooperative with regard to the recovery of personal assets or payment of contributions.
Professional opinion
Deciding to enter a Protected Trust Deed is a serious decision. It is very powerful and has the capacity to deal with all levels of debt, but it's impact on the applicant's assets and credit rating shouldn't be underestimated.
Whilst there are many advantages of the trust deed, there are some serious disadvantages too, so it make sense to have a chat with a professional debt adviser before you make a commitment to this solution.
It, therefore pays to make sure you fully understand how a PTD will impact on your personal circumstances, particularly how it will affect your home and your assets, before you make any commitments.
For more information on the Protected Trust Deed solution please read -
Professional Protected Trust Deed Advice
If you would like to have a chat with us about how a Protected Trust Deed will impact on your personal circumstances please call 0800 088 7502.
Your consultation will be free, you're not obliged to take our advice and our conversation will be held in the strictest confidence.
Alternatively, complete the form below and one of our team will call you at your preferred time.
