A trust deed is a formal, legally binding document that transfers part or all of the debtors assets (money and property) to a trustee to manage for the benefit of the creditors. The trustee will probably ask the debtor to pay a sum over to them from their income on a regular basis (similar to an informal debt management programme or DAS). This is a private arrangement between a debtor and creditors.
The advantages of a trust deed for the debtor are
The Disadvantages of a trust deed for the debtor are
To become protected, a trust deed must meet certain requirements
A trust deed automatically becomes protected if it meets all these conditions unless a majority in number or one-third in value of the creditors objects in writing within five weeks of its advertisement in the Edinburgh Gazette. A trust deed is binding on all creditors when it becomes protected (similar to DAS in that it stops creditors from seeking to enforce their debt by diligence or sequestration). Money advice and expert professional advice, is essential if considering a trust deed.