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What is a Protected Trust Deed ?

A Protected Trust Deed is essentially the Scottish equivalent to an Individual Voluntary Arrangement (IVA). This is a legally governed procedure which enables you to repay any debts that you may have over a duration of time. The repayments that you make will be based on the amount you can currently afford to pay, with the remaining amount being written off.

The process of setting up a Protected Trust Deed

When you wish to set up a Protected Trust Deed you will need to list all of your debts and how much you can afford to pay. Your supervisor will then draw up a proposal for approval by your creditors. This must be agreed by two thirds of the creditors. Once registered, this prevents legal action being made against you and freezes any interest on your debts. You should be aware that if you own your own home then your creditors will have the right to any equity that there may be in your property.


There are a number of benefits to entering into a Protected Trust Deed and these include the fact that they are often a cheaper option then to administer sequestration. You will not have to have any contact with your creditors and they cannot take further action. Unlike sequestration you should still be able to remain in certain careers and continue as director of a company and be self-employed.

Protected Trust Deeds normally last around 3 years, after which you will be debt free.
You will also only have to pay back a monthly payment based upon the amount that you can afford.


Unfortunately though there are some drawbacks to having a Protected Trust Deed. You will find that your home and assets could be at risk. If in the future you wish to obtain some form of credit then this could be quite costly. However, remember that obtaining credit is not allowed until your Protected Trust Deed has been completed successfully to prevent further debt. Your credit rating will be affected by your debts for around 3 years after completion. Should you fail your Protected Trust Deed then you will most likely be sequestrated.