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EXECUTIVE SUMMARY
Trust deed reform is needed in order to strike a fair balance amongst the differing needs of debtors and creditors, taking account both of bankruptcy and the advent of a new statutory debt arrangement scheme.
This document seeks comments on whether or not further changes are needed to protected trust deeds in order to protect certain types of creditor.
In particular, it asks for comments on whether or not:
- Cancelling debt in a trust deed has a particularly harsh impact on Credit Unions,
- Cancelling debt in a trust deed has a particularly harsh impact on any other type of creditor,
- Trust deeds should give special protection to Credit Unions,
- Trust deeds should give special protection to any other type of creditor,
- Debt due to a 'protected' creditor should not be cancelled by a trust deed
- Debt due to a 'protected' creditor should be paid first (or 'preferred') in a trust deed,
- Whether protecting some creditors will have an undue impact on other creditors, and
- It would be right to have 'protected' creditors under a trust deed but not in a bankruptcy
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