A Protected Trust Deed, or PTD as it is sometimes referred, is a formal debt solution for people living in Scotland and it acts as an alternative to bankruptcy.
It offers people with debts greater than £10,000 and more than 3 creditors an opportunity to reach a voluntary agreement in the form of a ‘fixed term’ repayment plan, which is normally set to 3 years. The applicant agrees to repay as much of their debt as they can afford for the duration of the agreement, once their personal living costs have been accounted for from out of their income.
Once the Protected Trust Deed has been successfully completed, the creditors are legally obliged to write-off all the outstanding debt, leaving the applicant completely debt free.
Depending on the personal circumstances of the individual, this can mean that as much as 90% of the original debt can be legally written-off.
A Protected Trust Deed is a legally binding agreement that can only be proposed by a licensed Insolvency Practitioner. Once the creditors have agreed to the terms of the Protected Trust Deed, the Insolvency Practitioner becomes the administrator of the agreement and adopts the role of the Trustee. It is the Trustee’s responsibility to ensure the terms of the Protected Trust Deed are being adhered to whilst it is in force.
The Trustee is responsible for ensuring the applicant transfers ownership of his assets for the benefit of the creditors and property with high equitable values can be sold in order to benefit the creditors over all return.
However, in most cases where a property is involved, alternative arrangements are made so that the value of equity can be released without the need to sell the asset.
Protected Trust Deeds provide a valuable debt solution to people suffering with overburdening debt problems in Scotland and have saved thousands of individuals from having to declare themselves bankrupt.
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