What does a protected trust deed mean?
It seems like there are two different trust deeds; those that are ‘protected’ and those that aren’t. I’m struggling to understand the difference between the two; obviously having protection is what I want… I don’t want angry debt collectors knocking at my door or ringing me every day. What does a protected trust deed mean?
A protected Trust Deed is binding on your creditors. It means that if you comply with the terms of your trust deed then the creditors cannot take any further action against you to recover any debts you might be due to them. They cannot arrest your earnings or petition for your sequestration whilst you are subject to a Protected Trust Deed. Unlike an ordinary Trust Deed which is not binding on your creditors.
If when presented with your Trust Deed Proposals more than half in number or one third in value of creditors object to your Trust Deed then it will fail to reach protected status.