Protected Trust Deed | Debt Free Path

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A Protected Trust Deed is a formal insolvency procedure available only to residents of Scotland. It will affect your credit file for six years, may result in asset assessment including property equity, and will appear on a public register. Debt Free Path is not a regulated debt advice firm. Always seek free, independent advice before proceeding.

What is a Protected Trust Deed?

In Scotland, a Trust Deed is a voluntary agreement where you transfer your assets to a licensed Insolvency Practitioner — your Trustee — to manage your debts. Once the majority of your creditors agree to the terms, the Trust Deed becomes 'protected.' This legal protection means creditors cannot take further action against you to recover the debt included in the arrangement. At the end of the agreed term (typically four years), any remaining qualifying debt is written off.

Key Considerations

Before entering a Protected Trust Deed, it is essential to understand its long-term implications:

Asset Risk Your Trustee may require you to release equity from your property or sell certain assets — such as a vehicle — to contribute towards your debts. Always seek specific advice about any assets you own.

Credit Impact A Protected Trust Deed will remain on your credit file for six years from the date it begins, making it significantly harder to obtain credit, mortgages, or financial products during that period.

Public Record Your name and details will be listed on the Register of Insolvencies — a publicly searchable record maintained by the Accountant in Bankruptcy (AiB) in Scotland.

Employment Implications While most people can continue working normally, certain roles in finance, law, or regulated industries may have specific restrictions regarding insolvency. Always check your employment contract.

Trustee Fees The fees of your Trustee and the costs of administering the Trust Deed are paid from the funds you contribute during the arrangement.

How the Process Works

Initial Consultation You meet with a licensed Insolvency Practitioner who assesses your income, assets, and debts to determine whether a PTD is appropriate for your situation.

Proposal Drafted Your Trustee prepares a formal proposal for your creditors, outlining the payment terms and the contribution you will make over the arrangement period.

Protection Granted If creditors representing the required majority in value do not object within the statutory period, the Trust Deed becomes 'protected' — legally binding all creditors.

Monthly Contributions You make agreed monthly payments to your Trustee for the duration of the arrangement — typically four years.

Discharge On successful completion, you are formally discharged and any remaining qualifying unsecured debts are legally written off.

Is a PTD Right for You?

A Protected Trust Deed is typically suitable if you live in Scotland, have unsecured debts of £5,000 or more owed to two or more creditors, have a regular income but cannot repay debts in full within a reasonable period, and other solutions such as a Debt Arrangement Scheme (DAS) or informal plan are not appropriate.

How Debt Free Path Can Help

Explain how Protected Trust Deeds work in Scotland, including the role of the Trustee and the significance of 'protection'
Help you understand the implications for your credit file, assets, and professional situation
Compare PTDs with other Scottish debt solutions including Sequestration and the Debt Arrangement Scheme
Signpost you to FCA-authorised and non-profit organisations in Scotland who can provide regulated, personalised guidance

Exploring Scottish Debt Solutions?

Get free, impartial guidance on Protected Trust Deeds and all available options in Scotland — no obligation.