An Introduction to Protected Trust Deeds   

Steer clear of the pitfalls and shame of being declared bankrupt by getting a Protected Trust Deed.  In these times of global recession, even the most astute entrepreneur face the risk of insolvency.  However, with a PTD, he can enjoy security for his finances and his properties at least during its effectivity period.

Businesspersons and employed individuals have found refuge in PTD’s instead of facing the legal consequences of bad credits. It is similar to the Individual Voluntary Arrangements or IVA’s in England and Wales.

A PTD is a legal agreement between a creditor or a group of creditors and a debtor that enables the latter to propose a payment method suitable to his capabilities. 

Instead of facing the possible sequestration of his assets by creditors, a debtor can seek the help of an insolvency practitioner to initiate a conference with one or all of his creditors, from banks, suppliers, or even personal acquaintances with whom he has any debt to settle.  In deed of trust definitions, the insolvency practitioner is nominated by the distressed debtor and is agreed on by the creditors.

Once the creditors meeting is held, with the insolvency practitioner at the helm, an agreement is reached to the benefit of the involved parties.  The debtor is given the right to submit a proposal on how he could pay his credits according to his capabilities with no credit check required. 

The creditors, on the other hand, can vote on the proposal whether they would accept it or not.  A 2/3 vote in favor of the debtor’s proposal can lay the foundation of a PTD. An agreement is reached and is made legally binding, with both parties required to respect and implement.

With a PTD settled with creditors, the debtor is immune to county court claims, which could result into CCJs or county court judgments.  CCJs are issued by county courts after it hears the case of creditors against a particular debtor.  It usually results into conditions that may be too heavy for the debtor such as blacklisting in the community of creditors and sequestration of valuable assets.  The PTD, however, leads to an out-of-court arbitration in which not only the debtor gets advantages but also the creditors themselves.

Payment for debts will be easier since there will be no interests and other charges added to the principal amount loaned. The debtor will no longer have to worry with constant pressure since throughout the agreement’s term, which is three years; creditors cannot make collections and contact with him.  He is also protected from legal claims. Additionally, but definitely not the least, he rids himself of the shame of bankruptcy as well as the limitations of doing further business. 

To start the process of having a PTD, the debtor needs to avail of the services of a insolvency practitioner.  The insolvency practitioner will act as a trustee once the PTD is settled. He will also serve as the debtor’s adviser in the effort of repaying all the credit he has incurred.