A protected trust deed is a debt solution which is only available to people living in Scotland and able to contribute towards their debt each month.
The trust deed gives people in debt the opportunity to make one affordable payment each month which is divided between each creditor.
What Is A Protected Trust Deed
Those who enter a protected trust deed will propose to pay each creditor a percentage of the debt owed over 4 years and any remaining debt is written off.
A trustee is appointed to run the debt solution and their job will be to put forward a proposal to creditors, collect payments and distribute them.
All interest & charges must be frozen once the debt solution officially begins and creditors are unable to take further action such as submitting a bankruptcy petition.
During the four years someone is in a protected trust deed they will need to pay any additional money they receive towards the debts and trust deed fees. It’ll be the role of the trustee to monitor the finances of anyone in the trust deed and recoup as much money for the creditors as possible.
In the event someone’s income & expenditure doesn’t change and they don’t receive an inheritance or win the lottery they could repay just 10% of their debt.
Protected Trust Deed: How To Enter
Once someone has received free, independent debt advice and a protected trust deed is the best solution they will require a trustee to manage it.
The debt advice organisation will usually contact the trustee company for their client and may even collect all required paperwork.
Once the paperwork has been collected the trustee company will draft the trust deed document which the client signs and a proposal is sent to creditors.
The creditors will have 5 weeks from the date a proposal is sent to object but for the trust deed to fail it requires more than two thirds in value object.
Once the 5 weeks have passed without sufficient rejections it will become protected and the monthly contribution will begin.