Understanding the Protected Trust Deed (Scotland)
A Protected Trust Deed (PTD) is the Scottish equivalent of an Individual Voluntary Arrangement (IVA). It is a formal, legally binding agreement between you and your creditors, overseen by a licensed Insolvency Practitioner called a Trustee. IVAs are not available in Scotland — if you live in Scotland and require a formal debt solution, a PTD is the appropriate route.
A PTD typically lasts 48 months (4 years) — one year shorter than a standard IVA. At the end, remaining unsecured debt is written off. The process of gaining 'protected' status requires creditors holding more than half the total debt value to agree to the terms within 5 weeks.
How Does a PTD Work?
A licensed Scottish IP reviews your income, debts, and assets. They determine whether a PTD is suitable and calculate an affordable monthly contribution.
The Trustee drafts the Trust Deed and advertises it in the Edinburgh Gazette and the Register of Insolvencies. Creditors have 5 weeks to object.
If creditors holding more than 50% by value do not object within 5 weeks, the Trust Deed becomes 'protected' — binding on all creditors listed.
You make one affordable monthly payment to your Trustee, who distributes it to creditors. Creditor contact stops immediately on protection.
After 48 months (or longer if extended), remaining unsecured debts are written off. Your Trustee issues a discharge certificate.
Pros & Cons of a PTD
Advantages
- Scottish equivalent of an IVA — well-established solution
- Remaining debt written off after 4 years
- Legally binding on all creditors once protected
- Creditor contact stops on granting of protection
- Keep your home (equity may be considered)
- One affordable monthly payment
Disadvantages
- Scotland only — not available to English/Welsh/NI residents
- Appears on the Register of Insolvencies (public)
- Affects credit file for 6 years
- Assets including equity may be assessed
- Only 50% creditor approval needed (vs 75% for IVA)
- Some employment restrictions in certain sectors
Who is a PTD Best For?
A PTD is designed for Scottish residents who have unsecured debts of around £5,000 or more, owed to at least two creditors, with a regular income and who wish to avoid sequestration (Scottish bankruptcy). It mirrors the IVA closely in concept but operates under Scottish insolvency law.
PTD vs IVA — Detailed Comparison
This table compares key features of both solutions. Your individual circumstances determine which is most suitable — always seek regulated advice.
| Feature | PTD | IVA |
|---|---|---|
| Available to | Scotland only | England, Wales & NI only |
| Creditor approval threshold | Over 50% by value must not object | 75% by value must agree |
| Typical duration | 48 months (4 years) | 60 months (5 years) |
| Debt written off at end | Yes | Yes |
| Legally binding on creditors | Yes — when protected | Yes — when approved |
| Public register | Yes — Register of Insolvencies | Yes — IVA Register |
| Monthly payments | Yes — based on disposable income | Yes — based on disposable income |
| Home usually protected | Usually | Usually |
| Affects credit file | Yes — 6 years | Yes — 6 years |
| Overseen by | Licensed Trustee (Scottish IP) | Licensed Insolvency Practitioner |
IVA column highlighted for reference. Figures are general guidance only.
Our Verdict
If you live in Scotland, a PTD is the direct equivalent of an IVA and is often the preferred formal debt solution. It has a shorter term (4 vs 5 years) and a lower creditor approval threshold. For residents outside Scotland, a PTD is not available — an IVA should be considered instead.
Free advice: Scottish residents can get free advice from StepChange Scotland, Citizens Advice Scotland, and Accountant in Bankruptcy (AIB). Always verify your Trustee holds a valid Scottish insolvency licence.