WHAT IS A PROTECTED TRUST DEED
Debt free in four years
Debt free in four years
Stop creditors harassing you
Pay only what you can afford
If you’re in debt and a resident in UK, you may want to consider a Protected Trust Deed to help you escape the misery of debt and create a financial future which looks incredibly less bleak. An excellent alternative to Bankruptcy or Sequestrian, as it is known as in UK; a Protected Trust Deed is a formal arrangement between you and your creditors to help find a compromise and reduce the monthly payments you’re expected to pay to clear your debts. Similar to the Individual Voluntary Arrangement (IVA) in England, it must be arranged by a registered insolvency practitioner, meaning you and your creditors are bound by the terms of the arrangement. In UK, however, the insolvency practitioner is usually referred to as a Trustee.
Protected Trust Deeds are a very helpful solution for those with serious financial problems which have spiralled out of control and are continuing to mount up. You are, however, bound by the terms of the agreement so your individual financial circumstances should be carefully considered and the advice of a professional debt management company should be sought before deciding to apply for a Protected Trust Deed. When you make your application your name and personal details will be added to the register of insolvencies which will prevent you obtaining any further credit and serve as a warning to any creditors who have not yet been contacted, that you now have a Protected Trust Deed and this will prevent them from making any further contact with you to demand money. Once your Protected Trust Deed has been discharged, your details will be removed from the register.
ommonly known as a Protected Trust Deed, these arrangements are referred to as protected because following your registration on the, Register of Insolvencies, your creditors will be notified that you have applied to have your debts protected and if they agree, or a large number do not object then your deed will become a Protected Trust Deed five weeks after the initial registration.
One of the major benefits of a Protected Trust Deed is the complete removal of any further contact with your creditors as they will be managed and dealt with by your Trustee. You will also be able to condense your payments into one regular monthly payment which can makes your life far less chaotic and bring some sort of order back into your financial affairs and, ultimately, your life. Interest with be frozen at zero and no further late penalties can be added to your account by your creditors – who are bound by the legal terms of the arrangement.
It is important to note, however, that you too are bound by the legal terms of the arrangement and you must adhere to the payment terms to prevent your trust deed failing and your creditors making an insolvency order and forcing you down the path of a Sequestrian. One other downside, if it’s applicable, is your trustee may consider the equity in your home liable as part of the trust but you will not lose your home, just any equity which may or may not be available.
IS A PROTECTED TRUST DEED RIGHT FOR ME?
Protected Trust Deeds are an extremely sensible option if you have large, unsecured debts which have become unmanageable and you’re looking for a way to freeze the interest and reduce the monthly payments. They also allow you to majorly reduce the amounts owing by having a large proportion written off by your creditors through the Protected Trust Deed process.
There are many other debt solution options available to you, including a Seqestrian, Low Income Low Asset (LILA) and the Protected Trust Deed, so it is advisable to thoroughly consider these options and consult with a professional debt management company before making your final decision but, some of the benefits of the Protected Trust Deed route are listed below:
- You will no longer pay anything to any of your creditors apart from the PTD payment
- Creditors will, legally, no longer be able to pursue you.
- You will still be able to open a Bank Account
- Your business or ability to trade will not be affected
- You will not lose your home.
To qualify, you must be resident in UK and be able to meet the small regular payments.
You must consult with a professional debt management company and a Trustee who is registered to practice with the Financial Conduct Authority (FCA) and a registered insolvency practitioner.
When you apply, it is a legal obligation to declare all of your debts and creditors and provide an accurate account of your financial situations and any savings and assets which you may have. Failing to do this may result in the failure of your Protected Trust Deed and an insolvency of Sequestrian order being issued against you, which can lead to losing your home.
If you have any equity in your family home, endowment policy or other properties, your Trustee will seek to recover some of this equity to distribute to your creditors. This does not, however, mean you will be at risk of losing your home but, this possibility of losing equity should be very carefully weighed up when you consider whether a Protected Trust Deed suits your circumstances.