Fiduciary, as well as a mortgage, is one of the collateral security instruments through which a creditor may, in the event of the debtor failing to settle the debt, withhold the debtor’s assets in order to charge his claim. The main difference between mortgage and fiduciary is that in the mortgage the debtor retains ownership of the real-estate, while in fiduciary, the right of ownership is immediately transferred to the creditor.
A fiduciary is established by concluding an agreement securing a certain creditor’s claim to the debtor, transferring the debtor’s property to the creditor, or transferring any of the debtor’s rights to the creditor. Creditor is obligated to return the ownership to do debtor when the debt is fully paid.