Scottish Trust Deeds Help and Advice

debadzuk79

Hi,

Been paying £200 into trust deed now for 36 months and have not missed a payment yet. Looking at my direct debit I see another payment is scheduled to come out again next month. Am I just waiting for a release letter now and then I guess I cancel the direct debit myself like I did setting it up? Is there any reason a discharge would not happen after 36 months? I dont want to hassle the company who is dealing with it untill I am sure of what to do. Any help is appreciated. Thanks.

[Deleted User]

debadzuk79 wrote: »

Hi,

Been paying £200 into trust deed now for 36 months and have not missed a payment yet. Looking at my direct debit I see another payment is scheduled to come out again next month. Am I just waiting for a release letter now and then I guess I cancel the direct debit myself like I did setting it up? Is there any reason a discharge would not happen after 36 months? I dont want to hassle the company who is dealing with it untill I am sure of what to do. Any help is appreciated. Thanks.

debadzuk79,
I'm due to make my final payment to my TD tomorrow! I called my IP a couple of weks ago about another matter and while I was on the phone I asked what would happen after my final payment was out my accont and I was told I could cancel my DD to them after the payment had left my account.
If you have complied with the terms of the TD I don't see why it shouldn't have ended. I would call your IP, if you are unsure, even just to querie what happens next, that is what they are there for if they are a good IP they will not mind you calling.
I hope it goes ok for you.

Joany

debadzuk79 wrote: »

Hi,

Been paying £200 into trust deed now for 36 months and have not missed a payment yet. Looking at my direct debit I see another payment is scheduled to come out again next month. Am I just waiting for a release letter now and then I guess I cancel the direct debit myself like I did setting it up? Is there any reason a discharge would not happen after 36 months? I dont want to hassle the company who is dealing with it untill I am sure of what to do. Any help is appreciated. Thanks.

Hi Deb, we paid £260 a month for our TD over the 36 months never missed a payment, ours was by standing order though, but after the 36th payment I cancelled the standing order as it was still showing .. you can cancel DD if you have fufilled your part.If your still concerned about cancelling it though give them a wee call.

Our last payment came out April last year and we recieved our letter in Jan this year to say the case was closed..think it depends on the IP but it can take a while after the last payment comes out. but at least it's a great feeling to be free of the TD :j

fatgit

I get the feeling that is down to the individual to cancel the standing order once the 36th payment is made.

Of course, it is prudent to check with your IP first!

As far as I am aware, a standing order cannot be cancelled by the party receiving the funds.

[Deleted User]

Had to post today!
I'm debt free :j
The final payment towards my TD left my bank account today, I will delete my DD later in the week. I'm so glad its over,
I can now concentrate on saving for a house deopsit.
I hope everyone has had a great day despite the weather.

Joany

Congrats Pamela :beer: Here's to the future!

Good luck with the house :T

Joany

WardJLittell

Hi Kev1980 and all

Really need another perspective on an Trust Deed that I have received and is waiting to be signed.

I have 30k unsecured debt with 13 creditors that I am paying a reduced total £200 per month on an informal basis. I have been constantly bombarded by letter/calls to increase/review or take me to court so one thing led to another and I investigated the proposed trust deed (also £200 per month)

I have a joint mortgage of £130k with Northern Rock (Together) along with the £20k in the unsecured part. My wife is debt-free apart form this and she can cover the total mortgage and loan from her wages.

The IP says that the Unsecured NR loan must be included in the TD although they said that NR would be informed that the existing monthly payment will remain the same. So:

Will NR be ok with this?
Will they object to the whole thing being protected?
Will they pursue my wife for the full balance immediately?

If this happens and the TD fails to be protected, will the other creditors automatically go for sequestration. The last thing we want to do is endanger the house so we don't want to walk blindfolded into this.

Alternatives:

• Scraping around £6k from family and offering full and final settlements - around 14% (would they bite?). I would send them all a CCA letter to see if that would focus their minds.

• Debt Arrangement Scheme

Hope you or someone can help. I have heard good things about Trust Deeds but right now I feel like there's a gun at my head

WjL

coolcait

WardJLittell wrote: »

Hi Kev1980 and all

Really need another perspective on an Trust Deed that I have received and is waiting to be signed.

I have 30k unsecured debt with 13 creditors that I am paying a reduced total £200 per month on an informal basis. I have been constantly bombarded by letter/calls to increase/review or take me to court so one thing led to another and I investigated the proposed trust deed (also £200 per month)

I have a joint mortgage of £130k with Northern Rock (Together) along with the £20k in the unsecured part. My wife is debt-free apart form this and she can cover the total mortgage and loan from her wages.

The IP says that the Unsecured NR loan must be included in the TD although they said that NR would be informed that the existing monthly payment will remain the same. So:

Will NR be ok with this?
Will they object to the whole thing being protected?
Will they pursue my wife for the full balance immediately?

If this happens and the TD fails to be protected, will the other creditors automatically go for sequestration. The last thing we want to do is endanger the house so we don't want to walk blindfolded into this.

Alternatives:

• Scraping around £6k from family and offering full and final settlements - around 14% (would they bite?). I would send them all a CCA letter to see if that would focus their minds.

• Debt Arrangement Scheme

Hope you or someone can help. I have heard good things about Trust Deeds but right now I feel like there's a gun at my head

WjL

Hiya WjL and welcome

Have you had any independent advice at all, or have you only spoken to the company which might take on the Trust Deed? If you haven't spoken to anyone else, I would recommend that you speak to your local CAB or local authority money adviser about your situation and your options.

If you sign a trust deed, and it doesn't become protected, then that is proof that you are 'apparently insolvent' so you could be made bankrupt. You could apply yourself, or any of your creditors could do it. The trustee in your trust deed could also petition for your bankruptcy. They seem to be more likely to do that if there's a reasonable amount of equity in the property.

NR do have a reputation for objecting to trust deeds, and if they have enough of the total debt, their objection could mean that it doesn't become protected. If I've read your message properly, they have two thirds of your debt, so an objection from them would definitely mean that it didn't become protected.

They would certainly have the right to pursue your wife for the whole debt, but I couldn't say how long it would take them to do so.

DAS would offer you protection from your creditors, but if you're paying the debt at the rate of £200 a month, a money adviser might be reluctant to take on a DPP which runs for over 10 years. However, it's definitley worth asking, if you think that DAS would be right for you.

The bottom line though is that I really do think you wuld benefit from some independent free advice.

Good luck!

WardJLittell

Hi Coolcait - thanks for your reply.

Yeah - i haven't had any indepenedent advice outwith th IP in question.

But they have said that in my circumstance, if NR were still receiving the full monthly repayment then they would be unlikely to object.

The crucial question for me is if the TD fails then would this prompt the creditors to petition for bankruptcy? Your answer has made me doubt the whole thing.

I will seek some independent advice before I do anything.

The IP told me that he would discharge any interest in the house if I paid £500 or half of the equity. Now the house is worth 130-140k so their share of the equity will be nil to £5k. As I said, family could help with this type of amount.

I didn't even dream that the IP, in the event of the TD failing to be protected, would petition for bankruptcy.

Really worried now.

coolcait

WardJLittell wrote: »

Hi Coolcait - thanks for your reply.

Yeah - i haven't had any indepenedent advice outwith th IP in question.

But they have said that in my circumstance, if NR were still receiving the full monthly repayment then they would be unlikely to object.

The crucial question for me is if the TD fails then would this prompt the creditors to petition for bankruptcy? Your answer has made me doubt the whole thing.

I will seek some independent advice before I do anything.

The IP told me that he would discharge any interest in the house if I paid £500 or half of the equity. Now the house is worth 130-140k so their share of the equity will be nil to £5k. As I said, family could help with this type of amount.

I didn't even dream that the IP, in the event of the TD failing to be protected, would petition for bankruptcy.

Really worried now.

Hiya again

I've just picked up on this point from your previous post:

"The IP says that the Unsecured NR loan must be included in the TD although they said that NR would be informed that the existing monthly payment will remain the same."

How can that work? If the unsecured loan is included in the TD (as it should be) then you should stop making payments to it. So how can the monthly payment remain the same? That sounds like really odd advice from the would-be trustee.

The thing about a signing a trust deed is that it is a form of personal insolvency. It gets recorded on the Register of Insolvencies - like a sequestration/bankruptcy. It also gets advertised in the Edinburgh Gazette - like sequestration. By law, a trustee is supposed to make you aware of these things BEFORE you sign a trust deed.

If a trust deed fails to become protected, then you can be made bankrupt. Again, by law, you're supposed to be made aware of this BEFORE you get to the signing stage. The law doesn't say that you have to be told WHO could apply for your bankruptcy, but personally I'm not overly impressed by the fact that the trustee didn't let you know that he/she could do it.

There's no guarantee that any of your creditors would apply for your bankruptcy even if the trust deed failed. If they take the view that they're more likely to get money out of you by harassing you on the phone, or by letter, then they might just stick to doing that.

If there's so little equity in your house, I do have to wonder what advantages a trust deed has over bankruptcy for you. A trust deed will last for three years - although they can last longer if the trustee chooses not to discharge you. You would be expected to make a monthly payment throughout that time.

You would be discharged from bankruptcy after one year, though you would have to pay a contribution/Income Payment Agreement for three years, if that's what you had agreed.

If family/friends are willing to pay the trustee in a trust deed to buy out the equity in your property, then wouldn't they do the same thing if you were actually bankrupt?

I'm glad you are thinking about going for independent advice, because that will give you the chance to run through these points.

All that said, if you own a house, you might not actually be in a position to apply for your own bankruptcy - unless you've already received a Charge for Payment or Statutory Demand from a creditor?

Ironically, if you sign a trust deed, and it doesn't become protected, you could use that to show that you are 'apparently insolvent', and apply for your own bankruptcy.

All of that is before you even start considering DAS!

I know it's a really tough time for you, and there probably seem to be too many options and ifs and buts and maybes. And I really do feel that a chat with someone neutral could help you a lot.

Good luck!