Creating a Protected Trust Deed

Older woman sat facing the camera smiling.
A bit about Protected Trust Deeds and how to qualify for one. 

A Protected Trust Deed is a legally binding agreement between you and your creditors. You make regular payments for a fixed time, after which balances remaining are considered satisfied (written off). CAP can check if this is a suitable option for you.

What is a Protected Trust Deed?

A Protected Trust Deed (PTD) is a voluntary arrangement through which you make regular payments towards your debts for a number of years. PTDs usually last at least four years. At the end of the agreed time frame, the rest of your debt is considered written off, as long as you’ve provided information and updates as needed, made payments as required and generally co-operated.

This is a legally binding agreement administered by a Trustee who is a qualified Insolvency Practitioner. A Protected Trust Deed also requires you to transfer any property to the Trustee, for the benefit of your creditors. The value of this will be assessed at the start and end of the agreement.

If a Protected Trust Deed is the best option for you, we’ll advise you on your next steps.

To qualify for a Protected Trust Deed, you must apply through an insolvency practitioner. You must also have at least £5,000 of debt, which you are unable to repay within four years on a reasonable budget. CAP doesn’t offer Protected Trust Deeds so if you wanted to have one, we would need to refer you to someone else.

You will also need enough disposable income to make a contribution towards your debt through the Protected Trust Deed.

What debts does a Protected Trust Deed include?

Debts you can include in a Protected Trust Deed include non-priority or unsecured debts.

You cannot include:

  • court fines and other court orders, such as penalties and compensation orders

  • debts obtained fraudulently

  • maintenance payments to a spouse, civil partner or children

  • student loans.

More information about what debts can be included on the Scotland Gov website.

FAQs about Protected Trust Deeds

When you have fulfilled your obligations to the PTD e.g. made all your payments for the correct amount of time, then any other debt included in the PTD deed will be written off.

If you own your home, you may have to sell it to raise funds for your Protected Trust Deed.

You cannot revoke a Trust Deed once it has been set up, but you can request some adjustments if you are struggling to keep up with repayments. 

You can request that your repayments are lowered, that you take a temporary break from making repayments or that you extend the term of the agreement. 

You will need to speak to your trustee for more information on the above. 

If you can no longer make payments to your trust deed, it could be cancelled. If it is cancelled, your creditors will be able to proceed with reclaiming what you owe them.

Go back to other potential routes out of debt