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Protected Trust Deed

What is a Protected Trust Deed?

If you live in Scotland and are struggling to repay unsecured debts, then you could solve your financial situation with a Protected Trust Deed (PTD).

A PTD will help you to repay your debts at a more affordable rate for a fixed period that normally lasts for 4 years and as it’s a legally binding agreement, all interest and charges will be frozen. It also means you’ll be protected from your lenders – so they will no longer be able to contact you directly or petition for your Sequestration (Bankruptcy).

Another great benefit of a PTD, is that at the end of the Deed period, which normally last 4 years, any debts that still exist will be written off – leaving you free from debt included in the Deed after 48 months!

Call today for a no-obligation financial review, or complete the enquiry form and a member of our friendly team will call you back.

 

What a PTD will do for you

Lower your debt repayments

We’ll draw up a realistic repayment plan with you – making sure you have enough cash every month to pay for essentials like bills and food. We will then pass your case over to an Insolvency Practitioner (IP) of our choice who will then draw up a repayment proposal which they will present to your lenders.

A PTD is subject to lenders agreeing to be included in the Deed – which is not always guaranteed. You can learn more about this in the key information and fees section at the bottom of the page.

Freeze interest and charges

Because a PTD is legally binding, lenders must freeze all interest and charges by law – this means your debts will not increase.

Provide full protection from lenders

The PTD will provide full protection from lenders – this means they cannot contact you at all during the PTD period. They cannot petition for your Sequestration either, so you can relax in the knowledge that no action will be taken against you while you repay your debts – providing you keep to the terms of the Deed.

Write off debt

When the PTD period comes to an end, any debts included in the Deed that still exist will be written off!

If you are a homeowner, you may be asked to release equity from your property in the final year of the PTD to help repay your lenders, but this will depend on your personal situation.

Clear debt in 48 months

Providing you keep to the terms of your PTD and follow the advice outlined to you by your appointed Insolvency Practitioner, then you can be expect to become free from unsecured debts in 48 months.

Ongoing support and advice

Your Insolvency Practitioner is on your side until you finish your PTD, so if you have any problems or questions, all it takes is a phone call to get the advice you need.

PTDs - what you need to know

What we charge and why

At Baines & Ernst, we help people beat debt by offering the highest standard of service, expert debt advice and affordable solutions. Our fees depend on your personal circumstances, and we’re always honest and upfront about these costs. Click here to learn more about our fee structure for all of our services.

Will a PTD be accepted by my lenders?

The initial PTD Advisory Service will be provided by Baines & Ernst. Once we have the relevant information regarding your finances, we will transfer your case to an Insolvency Practitioner who will draft a repayment proposal and present this to your lenders.

For a PTD to become protected and interest and charges to be frozen, one third or more of your lenders (by value) must agree to the proposal.

Will lenders write off debt?

Debts that still exist at the end of the PTD period, which normally lasts for a period of 4 years, will be written off, providing you have kept to the terms of the Deed and successfully complete the PTD.

If you are a homeowner, you may be asked to release equity from your property to help repay your lenders in the final year of the PTD.

If you have to remortgage your home to release equity from your property, you could find it hard to secure a mortgage with a lender because you have been involved in a debt repayment arrangement. In this case, your PTD could be extended for another year depending on the amount of debt that is owed– but this will all be discussed with you prior to starting the Deed.

You do not need to own a property to qualify for a PTD; therefore if you are not a homeowner, you will not be asked to make additional payments towards the Deed.

Will my credit rating be affected?

If you have already missed repayments or made late payments towards your debts, then your credit rating may already be affected.

By entering into a PTD, you will no longer be repaying debts at the amount originally agreed with you lenders, which means your credit rating will be affected for six years from the start of your PTD.

A record of the PTD will be held on your credit file for up to six years from the date the notice was issued following completion.

How are repayments calculated?

A financial review will be carried out with you to work out a realistic repayment plan once all your other bills including rent / mortgage, household bills and living essentials have been taken into consideration.

These details will be passed to an Insolvency Practitioner who will create a PTD proposal which will be presented to your lenders.

Repayments will be based on expenditure guidelines that have been put into place to ensure that you have enough money to maintain a reasonable standard of living. This will be discussed with you prior to starting a PTD so you know exactly what your repayments will be.

If your circumstances change, it is essential that you speak to your assigned Insolvency Practitioner so that you don’t fall further behind with you debts as failure to keep to the term of the PTD could lead to Sequestration (Bankruptcy).

What debts can be included in a PTD?

Only unsecured debts can be included in a PTD, this means debts not secured against your property. Household bills, child maintenance repayments and secured loans are also excluded.

Typical unsecured debts that can be included are credit cards, store cards, personal loans, payday loans, catalogue accounts, bank overdrafts.

Is there a cooling off period?

You will have a cooling off period of 14 calendar days from the date the PTD Advisory Service commences, in which you can cancel the PTD and the administration fee will be refunded.

After the cooling off period, you will not be able to cancel the Protected Trust Deed as it is legally binding once approved.

Insolvency Service guide

A copy of our Protected Trust Deed Service Terms of Business can be viewed here.

You can also view a free publication from The Insolvency Service ‘In Debt? Dealing With Your Creditors’ which provides an overview of some of the debt solutions that may be available.

Residents of Scotland can also look at the Scottish Governments ‘Debt Advice and Information Package’ guide here. There is also a free publication from the Accountants in Bankruptcy for Scotland called ‘Debt and the Consequences’.

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Answer a few simple questions and we'll help you find your solution.
  • Total unsecured debt: £500

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