The two types of trust deed

There are two types of deed - the 'Trust Deed' (often referred to as the unprotected trust deed) and the 'Protected Trust Deed'. Most debtors seek a Protected Trust Deed, the primary advantage of which is that it prevents creditors going to court to make you bankrupt.  To become protected, the trust deed must meet certain conditions laid down in law.

Making a Trust Deed Protected

To become protected, your Trustee will need to advertise your trust deed in the Edinburgh Gazette and write to your creditors advising that you wish a protected trust deed. 

Your creditors have 5 weeks from the publication of the notice to object. Your trust deed will automatically become protected unless your trustee receives objections representing:-

• more than 50% of your creditors in number.
• more than 33% of your creditors by value of the total debt.

Currently, it is not common for such levels of objection.

Once your trust deed becomes protected, all of your creditors who have been notified of the trust deed can no longer take action against you to recover their debt, unless of course you default on the trust deed.