Trust Deeds (IVAs) - Are they worth it?

MrsT1970

Hi all, I was advised to post this on this forum, hope someone can give me some advice, thanks:-

I have a loan with my bank, as well as a credit card and a store account. All told, I'm paying £350 per month, with the bulk of that sum (£243) for my loan. I phoned my bank last night to see if it was possible to extend the length of the loan term, thereby reducing the monthly payments. I'm not in financial difficulty, but it would be helpful if I could reduce my loan payments.

After going through my income and expenditure etc with the loan department, I was transferred to their Money Management Team, who went through everything again. Then I was transferred to a debt management company, who explained all about Trust Deeds/IVAs

He basically said that if I was to take an Trust Deed, my loan, credit card and store card balances would be consolidated together, I would be pay approx £250 per month for 36 months towards this sum and then whatever balance was left over would be written off. During those 36 months, I would not be able to obtain any more credit, but at the end of the period, I would be clear of debt.

Now I personally don't think that I need a Trust Deed as I'm not in the position where I can't get through the month with my income and outgoings. And I believe that I got myself into this debt and I will get myself out of it.

I have asked the company to send the information out to me by post before I make any decisions, but I don't think I'm going with it.

Any opinions would be greatly appreciated.

Mel

DVardysShadow

Post a statement of affairs. there may be better ways of handling this.

MIVAA

Hi MrsT,

A Scottish Protected Trust Deed (PTD) is a form of insolvency and, like all forms of insolvency, they should be entered into as a last resort really.

A PTD will impact on your credit rating for 6 years too, not just for the duration of the PTD which is just 3 years.

It certainly shouldn't be touted as a quick fix option.

From what you've said, it would appear that a Trust Deed would be completely inappropriate.

If you feel able to afford your debts, but wish to explore the most efficient way of repaying them, then I would suggest you disregard the advice you have been given on taking the Trust Deed option, as it will only confuse the issue for you.

Good luck.

HTH.

MIVAA

moneysavingexpert79

If you take out a Trust Deed, you basically won't be able to get any unsecured debt for the next 6 years. You may be lucky if you get a mortgage in this time. It depends if you want to save £100 a month and be clear of debt in 3 years, or pay £350 a month for the remainder of the term you have with your outstanding loans and credit cards. Before writing off the idea of a trust deed, bear in mind that you'd be better off if you got one and didn't have access to credit as a result of getting one for the next 6 years. If you don't you'll probably just carry on paying them 0000's in interest for the remainder of the term, and keep spending money you can't afford on your credit cards, never getting out of debt.

At 1 point I had 2 loans 3 overdrafts and 11 credit cards. Now I have 2 overdrafts, 0 credit cards and 0 loans. I didn't end up taking a trust deed, but wish I had.

I know 2 people going through TD's at the moment and they can now see light at the end of the tunnel.

Charco_2

I'm surprised - astounded actually - that YOUR BANK got to speaking to you about a Trust Deed. Normally banks shy away from Insolvency as a solution for their customers (infact they try to block it at every turn!)

Anyway aside from the fact that I'm surprised, it was completely inappropriate of your bank to speak to you about it since from what you are saying, you are not insolvent!

The general theme on here seems to be that Insolvency is evil and Insolvency Practitioners are the devil's spawn - yawn! I work in insovency and would normally promote it as a debt solution WHERE APPROPRIATE! Unless there's something you're not telling us, then this doesn't seem like a good idea for you!

Do you have a house/mortgage or do you rent?

RAS

Charco

Which Insolvency Provider do you work for?