A Protected Trust Deed (PTD) is a formal debt solution that allows you to pay off eligible debt through affordable monthly repayments over a four year period. The remaining debt included in the PTD is then written off after it ends. To qualify for this debt solution, there are a number of Protected Trust Deed criteria you must meet.  

In this article, we will explore who qualifies for a PTD, the key eligibility requirements, factors that may affect eligibility and what to do if you don’t qualify.

Who Can Apply for a Protected Trust Deed?

Before you apply for a PTD, it’s worth checking whether you fit the eligibility criteria. To be considered, you must: 

• be a resident of Scotland
• have debts of £5,000 or more
• not have benefits as your only source of income
• have enough money to make monthly payments
• not have enough disposable income to fully pay off your debts in less than 4 years.

Key Eligibility Criteria

Below, we go into more detail about the specific eligibility requirements for a PTD:

• Scottish residency

A PTD is a debt solution governed by Scottish insolvency law, which is different from the rest of the UK. Therefore, you need to currently live in Scotland or have lived there over the past 12 months.  

• Income requirements

There is no minimum or maximum income level required to be eligible for a PTD. However, you do need enough disposable income – the amount of money left over each month after essentials – to be able to make monthly payments. For an estimate of how much this payment might be, you can try our PTD calculator. 

Your income can comprise things like your salary, pension and benefits. It’s important to note, though, that if your income comes soley from benefits, you won’t be eligible for a PTD. 

• Amount of debt

As a PTD is a debt solution, you should only apply for it if you can’t afford to pay your debt. Therefore, you must have at least £5,000 of eligible debt, which you can’t afford to pay off over a 4 year period using your monthly disposable income.

• Type of debt

You’ll need to check what type of debt you have and whether it can be included. A PTD only covers unsecured debt such as overdrafts, credit cards, payday loans and utility arrears. Debts including court fines, secured loans, student loans and compensation payments aren’t eligible for a PTD. 

• Assets

To be eligible for a PTD, you must be willing to transfer any assets, such as vehicles or property, to your trustee who may then sell them to pay back some of your debt.

Factors That May Affect Eligibility

There are a number of factors that may impact your eligibility:

• Home ownership

While you are able to apply for a PTD if you own your own home, you may have to sell it to pay off some of your debt. You may be able to exclude your home from your PTD in certain cases, for example if you have little or no equity, but this must be agreed with your trustee beforehand. 

• Employment

To be eligible for a PTD, you can’t be a company director. There are also certain jobs that won’t allow you to have a PTD and work there, such as those in financial or legal services. It’s therefore worth checking your contract before applying. 

• Creditor approval

It is possible to have a Trust Deed without creditor approval but it won’t be protected, meaning your creditors can still contact you, charge you interest and take legal action. To be approved for a PTD, you need either half of your creditors to agree, or the creditors who hold one third or more of your debt must give their approval. 

What to Do If You Don’t Qualify

If you do not meet the Protected Trust Deed criteria, there are a number of alternative debt solutions for those living in Scotland available, including:

• Debt Arrangement Scheme (DAS) – this allows you to repay what you owe at a rate you can afford and legally protects you from your creditors
• Minimal Asset Process (MAP) – this is a form of bankruptcy that writes off any eligible debts after a period of six months
• Sequestration – this is full administration bankruptcy, which writes off included debts after 12 months. 

For more information and advice about the best debt solution for you, you can contact our money experts. Alternatively, you can get free debt advice from MoneyHelper. 

FAQs About Protected Trust Deed Eligibility

Can joint debts be included in a PTD? 

If you share a debt with someone else, this is known as ‘joint and several liability’ and will be listed in your PTD. However, no payments will be made towards it by the trustee and the other person can still be pursued for the entirety of the debt. 

Am I eligible for a PTD if I have no assets?

Yes, it’s possible to have a PTD if you have no assets. However, the monthly payment needs to be high enough for your creditors to agree to the terms of your trust deed.

Will my credit rating be affected?

Yes, a PTD will appear on your credit file for six years from the start date, affecting your ability to obtain credit during this period. It will also be recorded on the Record of Insolvency (RoI). 

Am I eligible for a PTD if I’m unemployed?

This depends on where your source of income comes from. If it’s only benefits then you won’t be eligible. If you have other sources of income, you will need to demonstrate that they are reliable enough to make a monthly payment. You will also need sufficient disposable income for those monthly contributions.