Hi scottyjones.

In a protected trust deed your unsecured creditors cannot take legal debt recovery action against you.

It's quite uncommon for trust deeds not to become protected as insolvency practitioners understand the acceptance criteria of the major creditor groups.

However, when it does happen, most people will look at another option instead. Sequestration or the Debt Arrangement Scheme might be the most common candidates in this respect.

Worry not. The vast majority of TD's do get accepted to protected status. I know it's easy for me to say now that my TD is a PTD but it is genuinely the case.

Even if a creditor does not accept the TD this is not the end as it can still be negotiated to make it Protected by tweaking the numbers etc.

As for what happens if its not protected I will refer you to one of the Experts from on here to answer this. I think it still means some of the debt is dealt with through the TD.

Thanks.
I was just wondering if the TD wasn't protected, then what would be the point in keeping the TD on, I don't really understand the fogures but it seems like a hefty chunk of the money I am due to pay each month goes to the Trustee and not actually the creditors.

the money you pay goes into a big pot and the funds at the end of the TD are split equally amongst the creditors after your PTD practitioner takes their fee.

Yes it might seem like their fee is high looking from the outside in at the full process.

When I considered what RMS Tenon's fee is in relation to the TD's we have I though it was a large amount (although compared to some organisations I spoke to no where near as high as some go). I then considered the full picture including the responsibilities they take on and the administration involved and it made more sense. Untimely however its really the creditors who get to decide if the fees are high or not. With a TD there is full transparency in the figures and if they see the amount of the fees and accept them then they must consider them to be fair and reasonable.

At the end of the day, as long as the monthly figure you pay is the best and fairest it can be and the TD becomes protected with the creditors agreement then this is what, for you, is important. The fees which are paid and getting the best deal in the fees for the creditors is not really a concern IMO. That's for the TD practitioner and the Creditors to deal with.

Think about it this way.... You getting a mortgage is about you borrowing money from a bank at the best rate for you over a period of time. You have fees in this but its all lumped together and you make a decision based on the amount of time and the amount of money you will be paying back... Behind the sense however the bank is also borrowing the money from other banks for your mortgage and others at different rates which is negotiated by them. This includes admin fees for the negotiation etc. Your not involved in the negotiation even though the money they are borrowing is for your mortgage. The only important thing for you is what your paying and that you get accepted for the deal. This is how I though of the fees for the TD when we entered into ours.

Yeah, I understand all of that, but if, for whatever reason the Trust Deed didn't become protected, at that stage would it not be better to break ties with the trustee?

Im not really all that concerned about any of this at this stage, It's not really worth worrying or stressing about until you get the actual outcome, im just talking for talking's sake and putting out random scenarios.
Sorry, I wasn't specifically looking for advice as in "I need help", was just more of a "In this scenario where a TD doesn't become protected, would it not be better just not have a TD and not pay the Trustee's fees"

The practitioner should be able to talk to you about a DAS or Sequestration instead as the next logical steps if the TD is being rejected by the creditors and negotiation has failed. T

hat said I guess at this stage you could walk away from the process and try another practitioner although their may be a contribution to fees to be paid (need to review your paper work for this) and there is still no guarantee that the new practitioner would get the TD protected.

There isn't usually much point in remaining in an unprotected trust deed as the creditors that rejected it do not have to write their debt off at the end of it, nor are you protected from legal action during it.

If the trustee isn't able to negotiate with your creditors successfully to get the trust deed protected then you probably would just walk away at that point and try another option. Or your trustee would help you arrange an alternative route.