Protected trust deeds
A PTD is a formal debt solution where an agreement is made between a debtor and creditors to repay part or all of their debt.
The debtor conveys their estate to an insolvency practitioner (the trustee) to administer for the benefit of creditors. The arrangement normally includes a contribution from income for a set period.
Provided the debtor complies with the terms of their deed, the creditors can take no further action to pursue the debt or to make the debtor bankrupt. This is similar to Individual Voluntary Agreements in England and Wales, although there are important differences in the way they are set up and administered.
There were 1,393 PTDs registered in 2023-24 Q3, an increase of 0.1% when compared with 2022-23 Q3. Chart 4 shows that the number of PTDs have followed a similar trend to bankruptcies and had been generally increasing between 2014-15 Q1 and 2019-20 Q1, before declining in 2019-20 Q2.
Both PTDs and Bankruptcies have remained consistent since the pandemic.
Chart 4: Personal insolvencies by type of debt solution Apr-Jun 2015 to Oct-Dec 2023
As with awards of bankruptcies, the trend in PTDs registered is likely to be affected by legislative and operational changes. For example, the BADA(S) reforms, introduced from 1 April 2015, aligned the payment period in bankruptcy and PTDs to 48 months. Prior to this, those agreeing to a PTD were typically paying contributions for an additional year compared with those in bankruptcy. These changes have likely led to an increase in PTD activity levels.
In 2023-24 Q3, more PTDs were registered than bankruptcy awards, as has been the case since 2015-16 Q1.
The PTD Protocol was introduced on the 1st October 2021. It set out non-statutory changes to operational processes. The aim was to promote good practice, improve transparency and provide further clarity in support of the AiB PTD Notes for Guidance. This would better enable Insolvency Practitioners to manage debtor and creditor expectations in a PTD.
There is no legislative need for a trustee to follow the protocol provisions. Yet, since its launch, eight insolvency practitioners voluntarily agreed to do so. Of the total number of trust deeds protected in 2023-24 Q3, 91.5% had protocol compliant trustees.
More details can be found in the PTD protocol section.
A debtor in a PTD is normally discharged after 48 months. If the debtor makes the agreed payments, and cooperates with the trustee then the trustee will apply to AiB for the debtor to be discharged.
After the debtor has been discharged, the trustee may remain in office as long as necessary to conclude the administration of the trust deed.
There were 1,185 debtors discharged in the third quarter of 2023-24, a 34.4% decrease when compared with 2022-23 Q3. There were 1,553 trustees discharged in 2023-24 Q3, a 26.2% decrease when compared with the same quarter in 2022-23.
- First published
- Wednesday, 24 January 2024
- Last updated
- Wednesday, 24 January 2024
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