Each case is different and while the majority of trust deeds are accepted, your creditors do not have to agree to the trust deed if they do not want to. This is often because they feel they can receive more money via alternative means. If either 50% of the number of creditors, or creditors representing at least one third of the value of the debts do not agree to you entering such a plan, then your trust deed will fail to gain protected status.
What if my creditors do not agree?
If not enough of your creditors give their agreement, then your trust deed will be what is known as ‘unprotected’. This means the trust deed has no legal standing and creditors are able to continue you to pursue you for the money you owe and also take further legal action should they feel this is necessary. This could include petitioning for your bankruptcy.
What can I do if my trust deed is rejected?
You may be able to continue with your unprotected trust deed, however, you must be aware that your creditors are under no obligation to accept the payments you offer and it is also unlikely that they will freeze the interest and stop any charges from being added to your account. If this is the case you could find your debts continue to mount during this period.
Furthermore, not all of your debts will be cleared once the four years is up. Only those creditors who agreed to the trust deed will release you from having to pay any more, any creditors who rejected the trust deed will still expect you to pay back what you owe.
