The Protected Trust Deed Scotland is a way which allows a person battling with debts to find a way which one can arrange to settle the unsecured debts with the unsecured creditors. This new agreement is an alternative to sequestration and usually it lasts for a period of three years.

Is It Legally Binding?

The PTD is the Scottish version of an IVA – Individual Voluntary Arrangement and is legal binding agreement between the creditors and the applicant, and the creditors are not allowed to increase interest on the debts, and the addition of any late fees or charges. The presence of an Insolvency Practitioner is required because, the agreement is legal, the practitioner will double up as a trustee during the three years period. The practitioner will also act as an arbiter between the two sides, the trustee will have to make sure that, the debtor is keeping up the end of his bargain, in addition he also acts as the debtor protector from the creditors.

What Happens Afterwards?

Once the terms have been completed and all payments made, according to the agreement, one becomes debt free, even if, they have not paid the original debt amount. After this, the creditors have no choice but to write off the outstanding debt as part of their agreement. However, the trustee can amend the agreement when the applicant’s lifestyle improves or worsens, and he will keep an eye on the debtor finances, and ensure that they are fair enough.The trustee becomes the custodian of some of the assets belonging to the applicant, he will be required to dispose of them and the amount raised from the sale of the assets, will be distributed amongst the creditors.

How Do I Know If I Qualify For A PTD?

Not anyone will automatically qualify to apply for this deed, there are some certain requirements that one has to qualify with. One must owe at least £10,000 of the unsecured debts, and this amount should be owed t at least to three different creditors, the debtor must be able to pay 10% of the debts he has, after the practitioner has subtracted his services costs. Even though the applicant has to pay 10%, this will highly depend with the applicant circumstances. See here for information on finding the right scottish debt advice company to administer your Trust Deed.

The Protected Trust Deed has both its advantages and disadvantages.


Once you have signed on the dotted line, you are legally bound, you will only have to pay the amount you agreed upon, and after the period is over, you will be debt free

  • Since a insolvency practitioner is the mediator between the creditors and the debtor, he will meet with the creditors on your behalf
  • PTD’s are a government backed scheme regulated by the OFT meaning your case will be handled properley
  • If it happens that you own a home, you will keep your house, the trustee is only interested in equity
  • You are required to pay once monthly for the debt
  • The interest will be frozen, but if the trust , happens to fail at any stage, or you happen to come across a lot of money, one will be required to pay, both the fees and the charges
  • Unlike Sequestration, with a deed, one will face fewer credit restrictions in the days ahead.
  • Unlike sequestration, with Trust Deed Scotland, one may be allowed to hold a public office
  • PTDs are also regulated and monitored by the AiB (Accountants in Bankruptcy)


  • A Trust Deed will highly affect your credit worthiness
  • If you have any equity within your property, the equity5will have to be included in your agreement proposal
  • Your income and expenditure will be analyzed quite often and your monthly contributions, may fluctuate
  • If ones does not follow the conditions of the contract, your creditors may declare you bankrupt
  • Bad publicity as the agreement will be advertised in the Edinburgh Gazette
  • If you happen to receive any pay raise, inherit money or work overtime, your monthly payments will increase automatically

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