Mortgage With a Protected Trust Deed

What Is a Protected Trust Deed?

A Protected Trust Deed (PTD) is a formal Scottish debt solution — broadly the Scottish equivalent of an IVA, though it's a genuinely different legal process, governed by the Bankruptcy (Scotland) Act 2016 rather than English insolvency law. It's only available if you're resident in Scotland or have a genuine connection to Scotland. You agree to pay what you can afford toward your unsecured debts, usually over 4 years, and any remaining included debt is written off once you complete it.

The "protected" part matters: once creditors' 5-week objection window passes without enough opposition, they can no longer chase you, add interest, or take court action over debts included in the deed. You need at least £5,000 of qualifying debt for a trust deed to become protected.

Does It Cover Your Mortgage?

No — a PTD only covers unsecured debts like credit cards, personal loans and overdrafts. Your existing mortgage, and any other secured debt, sits outside the arrangement entirely and must keep being paid separately, in full, throughout. Missing mortgage payments while a PTD is running is treated as a completely separate, serious issue by lenders — the two are not connected, but both matter to your file.

Can I Get a New Mortgage While My PTD Is Active?

Very difficult, and rarely worth attempting. An active PTD signals ongoing financial difficulty to any lender, and most mainstream and even specialist lenders will decline outright while it's running. If you're a homeowner already inside a PTD, your trustee will have reviewed your equity as part of the arrangement — talk to them before approaching any lender, since your PTD terms may already address what happens to your property.

What Happens Once It's Completed?

Once your PTD completes — typically after 4 years — your included debts are written off and specialist lenders will start to consider you, usually with a larger deposit requirement (often 25%+) in the first year or two afterward. As more time passes since completion, your options improve. The PTD remains visible on your credit file for 6 years from when it started, not from when it completed, so a PTD that started 5 years ago and completed last year will show differently to lenders than one that both started and completed more recently.

Protected Trust Deed vs IVA — Why the Difference Matters

They're often described as equivalents, and functionally they're similar — but a PTD is not simply "an IVA in Scotland." Different legislation, different regulator involvement, and different technical rules apply. If you're comparing options and you live in Scotland, an IVA generally isn't available to you at all — a PTD, the Debt Arrangement Scheme, or sequestration (Scotland's version of bankruptcy) are the real alternatives. Getting this distinction right matters for how a lender assesses your case later.