What is a Protected Trust Deed?

A Protected Trust Deed is a legally binding arrangement between you and your creditors, exclusively available to Scottish residents. It involves making an agreed affordable payment between all your creditors monthly which typically lasts 4 years (But this can vary). After the agreed time period, any remaining debts included in the agreement will be written off.


There are two types of Trust Deeds – Protected and Not Protected. While your application for a Protected Trust Deed is reviewed it remains ‘unprotected’ (just a Trust Deed) – this means creditors can still pursue you for outstanding debts. Once the Trust Deed has been protected creditors included in the PTD can no longer chase you for payments.

A Trust Deed may not be accepted this is completely up to the creditors discretion.

If entering a Protected Trust Deed is suited for you, your adviser will assess your income and expenditure and work out an affordable payment for you ensuring that you have enough left over to cover you essential bills and basic necessities and then process your case to the Insolvency Practitioner (IP). There will be a restriction on your expenditure in the Protected Trust Deed. A Protected Trust Deed must be arranged by a licensed Insolvency Practitioner who will become your Trustee (an individual responsible for your financial affairs). The Insolvency Practitioner will prepare & present your case to your eligible creditors. If there are no significant objections (more than 33% by debt value or 50% in number) the Trust Deed will become protected.

Once a Trust Deed becomes protected any unsecured creditors included within it cannot take legal action against you to recover debts. You must maintain the monthly contributions agreed in the PTD.

Risk of failing your Trust Deed could lead to Bankruptcy. Should a Trust Deed fail through your own negligence for example failing to make your monthly contributions means that you could potentially lead to a Bankruptcy.


You have to be a Scottish resident and must owe at least £5000 worth of unsecured debts. You also need to have some spare income to be able to afford comfortable monthly payments for the duration of your agreement.


The Protected Trust Deed will be recorded on the public register.

Your Trustee will control any assets you have (Not including essential items) and they may be sold to raise funds for your creditors. If you are a homeowner you may be asked to release any equity by way of a re-mortgage.

All solutions affect your credit rating in some way. Your credit rating may be affected for up to 6 years and you may have difficulty obtaining credit in the future, depending on which programme you enrol into. Nevertheless, if you are having financial problems it is very likely that your credit rating has already been negatively affected, particularly if you have missed a payment. The good news is that no matter what your credit rating is, you can always rebuild it over time and this process can begin as soon as your plan ends, as long as you remain debt free once the plan has ended.