I've lifted this information from the AIB website which I thought some people might have an interest in. If you are looking for this full article you will find it under the news section on their website. It's called Protected Trust Deed Review 2016.

Introduction

1. The Accountant in Bankruptcy (AiB) is currently carrying out a review of Protected Trust Deed (PTD) legislation that was introduced by the Protected Trust Deed (Scotland) Regulations 2013 (the ÔÇ£2013 regulationsÔÇØ). This review will assess, wherever possible, the impact of the changes made to PTDs in the 2013 regulations.

2. As part of this PTD Review 2016 we are carrying out a consultation. This provides you with an opportunity to give your view on the changes that were introduced in 2013. We are inviting you to provide feedback on specific questions. Your responses will then be analysed and used, along with a range of other available information and evidence, to determine if any further changes are necessary to PTDs.

As part of the review the AIB have asked 13 questions but the ones I felt might be relevant I've copied below as this post will end up being too long if I list everything:

1. MINIMUM DEBT LEVEL OF £5,000 ÔÇô REGULATION 4

Question 1(a): Does £5,000 remain an appropriate minimum debt level?

Yes No

2. STATEMENTS IN RELATION TO TRUST DEED ÔÇô REGULATION 7

Question 2(a): Is the length of acquirenda period considered to be appropriate?

Yes No

3. PAYMENT OF DEBTOR'S CONTRIBUTION - REGULATION 8

Question 3(a): Is the contribution period of 48 months appropriate?

Yes No

Question 3(c): Where a debtor does not continue to make payments for a period of time during the agreement, is it right that the payment period can be extended?

Yes No

Question 3(e): Are there any circumstances when a debtor should be allowed to take a break from making payments during the period of the PTD?

Yes No

4. PAYMENT OF DEBTOR'S CONTRIBUTION - REGULATION 8 PARAGRAPH 4

Question 4(a): Is 48 months an appropriate timescale?

Yes No

5. DOCUMENTS TO BE SENT TO CREDITORS ÔÇô REGULATION 10

Question 5(a): Do you agree that the Common Financial Tool (currently the Common Financial Statement) is an effective way of ensuring transparency in calculating the level of contribution to be paid by each debtor?

Yes No

Question 5(c): Have you identified any issues with the application of the Common Financial Statement to PTDs?

7. DEDUCTIONS FROM DEBTOR'S EARNINGS ÔÇô REGULATION 14

Question 7(a): Is it appropriate that, where a debtor has failed on two consecutive occasions to pay their required contribution, the trustee can instruct the debtor's employee to make a deduction from the debtor's income?

Yes No

8. AGREEMENT IN RESPECT OF DEBTOR'S HERITABLE PROPERTY ÔÇô REGULATION 15

Regulation 15 introduced a process which enables the trustee and debtor to make an agreement regarding the amount of equity in the debtor's heritable property to be realised during the period of the PTD (this amount may be nil). This agreement is made on the date the trust deed is granted. This regulation also provides for the circumstances in which the agreement can be made void. Where the dwellinghouse is excluded from the trust deed, this regulation does not apply.

This change was made to allow proposals for action to address equity to be agreed at the outset of the trust deed, provides a known position on equity and gives maximum transparency to creditors.

Section 2 of Annex A includes statistical analysis of equity in Protected Trust Deeds.

Question 8(a): Have the changes introduced through Form 1B agreements, and Regulation 15, adequately addressed the treatment of equity in trust deeds?

Yes No

Question 8(c): Is a Protected Trust Deed an appropriate solution for someone who has assets, including equity, which exceed their total level of debt?

Yes 0 No 0

A big focus for the regulators and the AIB is the treatment of equity in Trust Deeds:

1. Treatment of equity in heritable property

The 2013 regulation changes introduced greater transparency through the extent of information that is presented to creditors in seeking protection of a trust deed. In particular, the Form 3 requires information on property valuation and outstanding security leaving creditors in no doubt as to the equity position. Additionally, the Form 3 must show the anticipated realisation in relation to the equity recorded.

A new process was introduced by way of the Form 1B agreement. This presents the option for a debtor and trustee to reach an agreement in respect of heritable property, at the outset of the trust deed. This is an agreement between the trustee and debtor to pay funds to remove the trustee's interest in their property. The agreement forms part of the trust deed proposal presented to creditors with relevant details highlighted on the Form 3. The advantage of the Form 1B agreement from a debtor's perspective is that is has the effect of freezing the level of equity thereby protecting their position during a period of house price inflation. The financial agreement included in the Form 1B can involve re-mortgaging, agreement to pay a fixed amount to buy-out the interest or additional contributions following the statutory 48 month period. Guidance makes clear that where different options remain available (e.g. re-mortgaging or additional contributions) the Form 3 must show the most pessimistic outcome from a creditor's perspective.

Average (median) equity figures

These figures have been drawn from the 9,040 PTDs granted after the legislation changes and protected before 31 January 2016, and show that:
ÔÇó Debtors own heritable property in 2,406 of the 9,040 PTDs.

ÔÇó In 2,126 of these PTDs, debtors have equity in the property.

ÔÇó The average amount of equity in the 2,126 cases was £10,000.

ÔÇó In 1,680 of the 2,126 cases, it was proposed that some equity would be realised from the property. The average equity to be realised was £1,680.

Average dividend

ÔÇó Of the 2,126 cases where there was equity available, the average dividend to be paid to creditors is expected to be 15.69 p/£.

ÔÇó Of the 1,680 cases where there is a realisation from equity, the average dividend to be paid to creditors is expected to be 16.45 p/£.

Average (median) equity figures ÔÇô top quartile

Across all PTDs granted in the period, there are 563 cases where the amount of available equity is greater than the total debts due to ordinary creditors.

However, the following statistics relate to cases which have been identified as being in the top quartile of cases where there is equity in heritable property. This quartile is comprised of the 532 cases with the greatest amount of equity.

ÔÇó The average amount of equity in the 532 cases was £43,016.

ÔÇó In 495 of the 532 cases, it was proposed that some equity would be realised from the property. The average equity to be realised was £1,848.

ÔÇó Of the top 532 cases where there was equity available, the average dividend to be paid to ordinary creditors is expected to be 16.63 p/£.

ÔÇó Of the 495 cases where there is a realisation from equity, the average dividend to be paid to ordinary creditors is expected to be 16.69 p/£.

I think the issue for the cases whereby people are entering into Trust Deeds when their equity is more than their debts is if their circumstances change and they cannot maintain the agreement it could put their property at significant risk.

Sorry it's a big post but hard to fit in all the information.