What is a protected trust deed?
A protected trust deed is a different kind of deal than a normal trust deed (sometimes called unprotected). A protected trust deed means your creditors can no longer take court actions against you and chase you for payments.
In a protected trust deed, your trustee (who manages all your assets in any trust deed) can still make transactions and keep paying your creditors. It takes about four years for you to be discharged from your debts. Sometimes it might take longer. Because you have not been declared bankrupt, it is still up to the creditors to discharge you.
How can I protect my trust deed?
To make your Trust Deed Scotland a protected trust deed, tour trustee needs to put an advertisement or notice in the Edinburgh Gazette. The trustee also has to write to all the creditors in questions, along with a copy of the Edinburgh Gazette notice. If the trustee fails to do so, creditors can still look things up in the Register of Insolvencies (more on how later). All the people who you owe money to have a time period of five weeks where they can object to the protecting of your trust deed. If a large part of your creditors (creditors representing one-third or more of your debts) or some big creditor objects on reasonable ground, you might be denied a protected state on your trust deed.
Are there any disadvantages?
There are not any disadvantages of protecting your trust deed except that your name will be made public in the Register of Insolvencies. It will stay there for probably a year. Unlike the unrecorded unprotected trust deeds, the recorded protected trust deeds can thus release the detail to anyone who enquires. This also means that credit agencies will blacklist your name.