Protected trust deed (PTD)

Key facts

How much debt must I owe? At least £5,000. Some insolvency practitioners may set their own minimum debt level at higher than £5,000.

What type of debt? Most debts except: fines, penalties, compensation and forfeiture orders imposed by any court; any debt that has been incurred through fraud; student loans; any obligation to pay maintenance to an ex-spouse due under a court order (not Child Support Agency arrears or Child Maintenance Service arrears); and money owed to a creditor whose debt is secured on your property (such as a mortgage or secured loan).

How long will it last? ​They usually last five years.

How it works

See our fact sheet:

Trust deeds.

A protected trust deed (PTD) is an alternative to bankruptcy. An agreement is drawn up by a licensed insolvency practitioner to pay an agreed amount off your debts over a shorter period of at least four years. Any unpaid part of a debt included in your trust deed is written off.

The arrangement will become protected and means all your creditors have to keep to it unless enough of your creditors object (see Disadvantages below).

National Debtline can help you to set up a PTD by referring you to a qualified insolvency practitioner. Contact us for advice.

Advantages

  • If a creditor agrees to the terms of the trust deed, the debt you owe them is ‘frozen’ at the start of the arrangement.
  • As long as you keep to the terms of the trust deed, no further interest will be added to the debt. Once the trust deed has been set up, they should direct most correspondence to the trustee rather than to you.
  • You can still have a bank account. This is usually an instant access account, where you can use a cash card, but you do not get a cheque book, cheque card or an overdraft facility. Contact us for advice.
  • You can still continue to be employed in most cases. (It is always a good idea to check your contract of employment to make sure that a trust deed will not affect your job.)
  • You may still be able to hold public office, although some public bodies may have their own rules preventing this.
  • Any monthly payments you have to make based on your earnings may be increased or decreased if your circumstances change.
  • You may be able to enter into a trust deed without putting your home at risk.

Disadvantages

  • Only the creditors who agree to the terms of your trust deed are bound by the arrangement, unless it becomes ‘protected’.
  • If you do not cooperate with the trustee, they can try to make you bankrupt.
  • You cannot continue to be the director of a limited company unless your trustee agrees and unless the rules of the limited company allow you to enter into a trust deed.
  • Some public bodies, such as councils, may have rules that prevent you from holding office with them.
  • Your credit reference file will be affected. This could make it more difficult to take out further credit during and after the trust deed.
  • A trust deed cannot include certain debts.