Protected Trust Deed

A Trust Deed is a formal arrangement between you and your creditors.  Usually, it involves you paying an agreed figure (known as a contribution) from your income over a pre-arranged period of time (usually 36 months).  The payment is calculated following an examination of your income and reasonable expenditure.

A Trust Deed is not a form of repayment programme (DAS).  It is however, similar to sequestration in that it provides debt relief and at the end of a concluded trust deed, your debts will be written off.

The Trust Deed is administered by your trustee who is a licensed Insolvency Practitioner, who is obliged to ingather funds on behalf of your creditors.  This usually involves the collection of your contribution but may also include realising the value of your assets.  This does not necessarily mean selling your assets and does not in any case involve your essential household furniture and other goods.

In practice, homes and cars are rarely sold, but each case must be assessed individually.  A Trust Deed would not proceed with our affiliated partners until all matters had been discussed with you and fully understood by you, including your trustee’s proposals regarding any assets that you may own.

To enter into a trust deed, you must have sufficient disposable income and/or assets to enable a minimum distribution to be made to your creditors.

Creditors have a period of time in which they can object to your trustee’s proposals.  Assuming that insufficient objections are received, your Trust Deed becomes “Protected”.  At this point your unsecured creditors are no longer able to take action against you and you should stop receiving demand letters and telephone calls etc. from them.

If your creditors do not agree to the Trust Deed proposals your trustee will consider an application for your sequestration (bankruptcy).

The Trust Deed cannot set aside arrestments, inhibitions or other enforcement proceedings which have been effected prior to the signing of the Trust Deed, however, when protection is achieved, no unsecured creditor can commence enforcement proceedings.