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Protected Trust Deed - PTD

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Protected Trust Deed

A Protected Trust Deed, often known as a TD or PTD is a solution that is exclusively available in Scotland and was  adevelopment by Government Legislation to help people struggling with debt to find a lasting solution to their financial difficulty. 

If you qualify for a TD you would make an affordable monthly repayment, for typically 3 years. Once the 3 years are completed, the TD ends and the debt included and not repaid is written off. This can be as much as 85% of your debt. 

Trust Deeds can be a great way of dealing with debt but like all debt solutions, there are upsides and downsides that require careful consideration. 

  • Write off debtAs much as 80%
  • Reduce monthly repaymentsAlways affordable
  • Freeze interest and chargesSo your debt stops getting any bigger

How does a Trust Deed work?

If you live in Scotland and you are struggling with debt that you can not afford to repay then a Protected Trust Deed is certainly worth considering as it could provide a lasting solution to your debt and an immediate improvement to your finances.
Consolidate Your Debts
All of your debt and debt repayments are consolidated into one monthly payment to make things more manageable.
Reduced Monthly Repayment
We calculate a new affordable monthly repayment. Based on your income and your monthly expenditures so it will always fit into your household budget
Interest & Charges Frozen
To ensure you're debt is not getting any bigger, your creditors have to freeze the interest and they can't put on any extra charges.
Protection From Creditors
A TD is a legal agreement so as soon as it is in place your creditor can no longer contact you. No more letters, no more calls and no more knocks on the door.
Debt Free in Typically 36 Months
You make your monthly payment, once a month for usually 36 months and then the TD is completed and you are free from all of the debt included on the TD
Write off Unaffordable Debt
Once you have made your 36 monthly payments the TD finishes. There will be debt left over which you will not have to repay. This can be as much 80% of your debt.

Example of Protected Trust Deed:

Everyones situation is unique. Debt levels, incomes, assets and expenditures will be different for each person. However, below is an example of how a Protected Trust Deed may work.

Before a Trust Deed:

Total debt: £18,000
100%
Monthly Repayments: £643
100%
Time in debt: 13 years
100%
Debt written off: £0
100%

After a Trust Deed:

Total debt: £5,400
30%
Monthly Repayments: £150
23%
Time in debt: 36 months
23%
Debt written off: £12,600
30%

The downsides to a Trust Deed

As with all debt solutions there are both pros and cons. Most people struggling with debt may already be feeling the downsides such as credit rating negatively impacted or creditors chasing them for payment. That said, it is always important to know the good and the bad of every debt solution before making your decision on how to proceed.
Not Everyone Qualifies
Sadly not everyone can do a TD. TDs need to be agreed by the creditors and this means there are some criteria that needs to be met before they will accept it. The good news is that for most people we can find out if you qualify pretty quickly.
A Negative Impact on Credit Ratings
A TD is not good for your credit rating. Whilst you are on a TD you are unable to get more than £500 credit. Once the TD finishes it will stay on your credit rating for 3 years. For most people considering a TD they probably don't want or can't get more credit until things are back under control anyway.
Not all Debts are Included
Student loans, court fines, child maintenance, secured loans, mortgages etc will not be included in a TD. Debts such as personal loans, credit cards, utility arrears, overdrafts and store cards usually are.
Property is affected
For a TD to be agreed, you must convey all your assets to your Trustee. That includes any property that you own. In some exceptional circumstances it may be possible to exclude your property.
Money Advice Service

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