Advantages of a Protected Trust Deed (PTD)
The trustee handles all correspondence from creditors, therefore relieving the pressure of debt.
A Protected Trust Deed (PTD) is usually more flexible and costs less to administer than bankruptcy (sequestration).
With a Protected Trust Deed (PTD), your creditors will be unable to add further interest, charges, or take any further action against you.
You will in most cases still be able to hold certain public offices.
You will in most cases still be able to remain self-employed and continue to serve as a director of a company.
Protected Trust Deeds (PTD) normally last 3 years, after which any remaining debt will effectively be written off.
Information about the Protected Trust Deed is not published unlike bankruptcy (sequestration).
Disadvantages of a Protected Trust Deed (PTD)
Existing arrestment’s and other diligence continue to be effective. It should be noted that Councils who carry out earnings arrestment will generally lift arrestment’s upon protection of the Trust Deed.
You cannot be a company director of a limited company unless the company’s Article of Association state otherwise.
The arrangement is binding on you as well as your creditors. If you were to default on the arrangement then the Insolvency Practitioner can petition for your bankruptcy (Sequestration)
Entering into any arrangement with your creditors may affect your credit rating.
Creditors are not obliged to accept a proposal for a Trust Deed. However, the Trustee will negotiate with all your creditors. Unless creditors, who are owed more than one third of the total debt object (which is extremely rare), the Trust Deed will become protected.
The trustee handles all correspondence from creditors, therefore relieving the pressure of debt. A Protected Trust Deed (PTD) is usually more flexible and costs less to administer than bankruptcy (sequestration). With a Protected Trust Deed (PTD), your creditors will be unable to add further interest, charges, or take any further action against you. You will in most cases still be able to hold certain public offices. You will in most cases still be able to remain self-employed and continue to serve as a director of a company. Protected Trust Deeds (PTD) normally last 3 years, after which any remaining debt will effectively be written off. Information about the Protected Trust Deed is not published unlike bankruptcy (sequestration). Disadvantages of a Protected Trust Deed (PTD)
Existing arrestment’s and other diligence continue to be effective. It should be noted that Councils who carry out earnings arrestment will generally lift arrestment’s upon protection of the Trust Deed. You cannot be a company director of a limited company unless the company’s Article of Association state otherwise. The arrangement is binding on you as well as your creditors. If you were to default on the arrangement then the Insolvency Practitioner can petition for your bankruptcy (Sequestration) Entering into any arrangement with your creditors may affect your credit rating. Creditors are not obliged to accept a proposal for a Trust Deed. However, the Trustee will negotiate with all your creditors. Unless creditors, who are owed more than one third of the total debt object (which is extremely rare), the Trust Deed will become protected. 