What is a Protected Trust Deed?

A Trust Deed can take many forms but in Scotland it is the process by which a person in financial difficulties is able to transfer their assets, via a legally binding Trust Deed, to a Trustee appointed for the benefit of the creditors. While the act of transferring assets to a third party is obviously alarming, for some people it actually protects them against further claims on their assets for monies owed (sequestration) – this is known as a Protected Trust Deed.

As soon as a Trust Deed is signed this ensures that all correspondence about the financial affairs of the party involved are looked after by the Trustee. The downside is that any assets held under the Trust Deed could in theory be sold off to pay back creditors – but in reality there are laws to ensure that the parties involved are afforded a minimum standard of living.

As the UK economy takes a tumble we are set to see a major rise in the number of Trust Deeds in Scotland over the next few years. While the economy could pickup tomorrow (although highly unlikely if forecasts are correct) it can often take up to 18 months for financial difficulties to reach a head and Trust Deeds and Protected Trust Deeds sought.

We will be covering all aspects of the Trust Deeds, what they mean in principle and where you can obtain the latest advice.

Bankruptcy England and Trust Deeds Scotland » »
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