We believe in full transparency. Here is an honest look at the advantages and the real considerations of a Protected Trust Deed.
Before entering a Trust Deed, make sure you understand these six areas clearly so there are no surprises later.
The Trust Deed stays on your credit file for 6 years from the start date, not the end date. Since the term is 48 months, the entry will still be visible to lenders for approximately 2 years after you are discharged. Plan any mortgage, finance, or rental applications around this timeline.
If you own property, your Trustee must assess and potentially realise equity, typically in year four. This could mean remortgaging or extending your payment period. Discuss your property situation explicitly with your IP before you sign the Trust Deed - not after.
If you receive a significant sum of money - inheritance, redundancy payment, personal injury award - during the Trust Deed, your Trustee may have a legal claim on part or all of it. This applies for the full term. Always notify your Trustee immediately if this happens.
Regulated roles in financial services, law, accountancy, and some civil service positions carry specific restrictions during formal insolvency proceedings. Check your employment contract and any professional body rules before you proceed. Your IP can help you understand the implications.
Student loans, child maintenance, HMRC penalties, court fines, and secured debts (such as your mortgage) are excluded from the Trust Deed and remain your full responsibility throughout. Make sure you have a clear, funded plan for these before you start.
Every year your Trustee reviews your income. A significant pay rise, promotion, or new higher-paying job can result in your monthly contribution being increased for the remainder of the term. This is a normal part of the process but can surprise people who are not expecting it.
Use these four questions as a checklist when speaking to an Insolvency Practitioner for the first time.
A PTD is one of several Scottish debt solutions. A Debt Arrangement Scheme, sequestration, or the Minimal Assets Process might be more appropriate depending on your income, assets, and total debt level. Ask your IP to explain all options before you decide.
Your monthly payment must be genuinely affordable for the full 48 months. Be honest about your budget - including irregular expenses such as car repairs, dental bills, and holidays - so the payment set is realistic and sustainable from day one.
If you are a homeowner, ask your IP for their assessment of your equity situation and exactly how they plan to address it. Understanding the home equity process before you sign avoids a very unwelcome surprise in year four of your Trust Deed.
Ask for a complete written breakdown of how the Trustee is paid - fees come from your monthly contributions before creditors receive their share. A reputable IP provides a full fee statement in the proposal document. Do not proceed without reviewing this document carefully.
The best way to decide whether a Trust Deed is right for you is a free, no-obligation assessment with a licensed Insolvency Practitioner who can review your full financial picture.
Before making any decisions about a Protected Trust Deed, you are entitled to free, impartial debt advice from government-backed services. These services are completely free and have no obligation to use any particular product.