Dealing with your non-priority debts


You may want to think about bankruptcy even if you have some money left to pay your creditors.



what are protected trust deeds?

Creditors can object to a trust deed going ahead by voting against it. If enough of your creditors either agree to your proposal or don't reply (because this will be treated as agreement), your trust deed can become a 'protected trust deed'. This is a special kind of trust deed and stops your creditors taking any enforcement action against you, such as bankruptcy or sequestration (another name for bankruptcy). Legally all of your creditors that are included in a protected trust deed must accept this arrangement, as long as you keep to the conditions.

Trust deeds

 A trust deed is another option instead of bankruptcy. This is a formal arrangement with your creditors. You make an agreement, through an insolvency practitioner (called a 'trustee'), to pay an agreed amount off your debts over a fixed period of at least four years. The rest of your debts are written off. The arrangement might also involve selling your assets, such as your home, so that the money raised can be paid into your trust deed.

Trust deeds have to be set up by an insolvency practitioner. Their fees can be quite high. However, if your trust deed was set up on or after 28 November 2013, these fees will be taken from the monthly instalments you pay. A trust deed is a voluntary agreement with your creditors. If you have a protected trust deed, your creditors must keep to this agreement.

Applying for a trust deed is a serious step. You need to get independent advice and think carefully about whether it is the best step to take, particularly if you own your home. Remember that other options might be available, such as a DAS debt-payment programme. Contact us for advice.

Extra advice:

a protected trust deed through National Debtline

We may be able to refer you to an insolvency practitioner. Contact us for advice.

See our fact sheet:

Trust deeds.