Trust Deeds (TD) are legally binding arrangements between a debtor and their creditors in the UK. They are a form of debt relief that allow an individual to pay off their debts over an agreed period of time. The purpose of a TD is to provide an alternative to bankruptcy, allowing debtors to make regular payments over a period of time in order to clear their debt.
A TD is a three-way agreement between the debtor, their creditors, and a third party, known as a Trustee. The Trustee is responsible for administering the TD and ensuring that the creditors are paid in full. The Trustee will manage the debtor’s finances and ensure that they make regular payments to their creditors. The Trustee will also ensure that the debtor makes the agreed payments on time. If a debtor fails to make the agreed payments, the Trustee can take further action.
The scope of a TD is to provide debt relief in a structured and controlled manner