PART 14 SVoluntary trust deeds for creditors

Effect of protected status etc.S

172Effect of protected status: generalS

(1) Where a trust deed has protected status then—

(a)subject to section 177, a creditor who (either or both)—

(i)is not a notified creditor, or

(ii)notified the trustee, during the relevant period, of objection to the trust deed,

has no higher right to recover the debt than a creditor who has acceded to, or been deemed by virtue of section 170(2) to have acceded to, the trust deed, and

(b)an application for sequestration of the debtor's estate may not be made by the debtor while the trust deed subsists.

(2)A creditor ceases to be deemed (by virtue of section 170(2)) to have acceded to a trust deed if the trustee refuses a request by the debtor to apply to AiB for discharge in terms of section 184(8).

(3)Where a secured creditor's agreement has been obtained by virtue of section 166(2)(b) and the trust deed becomes a protected trust deed, that creditor is not entitled—

(a)to make a claim under the protected trust deed for any of the debt in respect of which the security is held,

(b)to do diligence against the assets conveyed to the trustee under the protected trust deed, or

(c)to petition for the sequestration of the debtor during the subsistence of the protected trust deed.