There are two different types of trust deed - a voluntary trust deed and a protected trust deed.

 

An voluntary trust deed is not legally binding on creditors, which means they can still take action to recover the money they are owed regardless of the trust deed agreement. They could, for example, still apply to make you bankrupt.

 

A trust deed can become protected if a majority of creditors agree to its terms and it meets other detailed conditions. A protected trust deed is a legally binding agreement and creditors cannot take further action to recover the money they are owed as long as the terms of the trust deed (for example, making regular monthly payments) are not broken.

 

You can find out more about trust deeds by talking to an approved money adviser.