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Protected Trust Deeds
What is a Protected Trust Deed?
A detailed overview
A Trust Deed agreement is a formal solution to your debts, and it is intended to take away the anxiety and stress of multiple unmanageable debt payments, by combining them into a single regular affordable repayment.
A Deed of Trust offers protection from any legal action initiated by your creditors, and protects any assets, including your home, from the threat of repossession. Trust Deeds can be voluntary, but it is only when they become protected, binding both parties to follow the Deed, that you are offered any type of legal safeguard.
Overseen by the Accountant in Bankruptcy (AiB) a Trust Deed is a secure and formal alternative to bankruptcy, used in Scotland. An individual, or a partnership, should be resident in Scotland for at least 6 months prior to any application. 

Essentially, a Trust Deed transfers the debtor’s estate to a trustee for the duration of the Deed, for the benefit of the creditors, and is often called a Scottish Trust Deed.
A Trust Deed could be a successful route for individuals facing debt problems, as it safeguards the debtor from any legal enforcement usually attached to the various other types of debts, thus preventing stressful letters and bailiff action.

Once the Scottish Trust Deed is protected (see below), whilst it does not reverse any action taken before its initiation, such as bank arrestment, or earning, your trustee can negotiate the lifting off any arrestment. In certain extreme circumstances, your house may have to be sold, but your trustee can negotiate Trust Deed arrangements enabling you to keep your property (see below).

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Scottish Protected Trust Deeds
A protected trust deed is binding to all creditors.

As long as you keep up with the repayments of your trust deed, creditors are prevented from taking any further action.

Conditions of a Protected Trust Deed

Under a Trust Deed, there are certain conditions that you must adhere to:
• A voluntary Trust Deed is not binding on creditors until they agree to its terms, thus making it protected. 
• Trust Deeds should only be agreed if there is a definite and obvious intention to have the terms presented to creditors for protection. If there is any doubt in this matter, the Deed need not be agreed on.
• Secured creditors can still take action, attempting to take possession of your home if you fall behind with mortgage, or Trust Deed, repayments. You should be very careful not to allow this to happen.
• A protected Trust Deed stops you applying for your own bankruptcy order, or for a debt payment programme under the DAS.  
• If any new debts are taken on after a Trust Deed is signed, you will not be protected from legal action by these new creditors, and if you default on their repayments, they can come after you, potentially forcing the sale of your property. This will have major repercussions on the outcome, and completion, of your Trust Deed arrangement.
• You can choose who your trustee will be – although you must adhere to the above conditions. A trustee will set out a fixed administration fee. He will also include a percentage of the funds collected for the Trust Deed. These fees will be paid from the money gathered by the trustee during the Trust Deed only, and should not be from a separate account, or source.