Notes for Guidance - Protected Trust Deeds - Bankruptcy (Scotland) Act 2016

A trust deed is a voluntary arrangement entered into by a debtor to convey assets to a trustee for the benefit of their creditors generally. A voluntary trust deed is not binding on any creditor who does not consent to its terms, due to this a trustee generally will seek to have a trust deed protected.

For the purposes of the 2016 Act, a trust deed must convey the debtor’s whole estate, with the exception of property which would not vest in a trustee in sequestration, to their trustee, see section 228(1) of the 2016 Act, with the exception of any dwelling house that it is excluded under section 228(1) of the 2016 Act.

The Accountant will not expect an insolvency practitioner to agree to be appointed as a trustee of a trust deed of a living individual and which is to be proposed for protection, if it can be demonstrated that the total contributions, calculated using the format of the Common Financial Statement, over the proposed period of the PTD are sufficient to repay the total debts (including interest) advised by the debtor prior to the granting of the trust deed.