trust deed help, reduction in income

cs206

Hi all

Hope someone can help me. My partner has a trust deed and lost his job in November. He has now found new employment (woop) however on a lower salary than his previous job.
he has phoned the Trust Deed company to explain as he is not earning as much he wouldn't be able to pay the sum they had originally worked out for him.
They have advised that he has to pay the original amount for the full 3 years or they will need to extend the trust deed or he can go down the bankrupt route.
Of course he doesnt want to do this that is why he entered into the trust deed. My understanding of them was they were flexible and if your circumstances changed then they would re-calculate your payments. His new employment will be a reduction in income of over £150 per month.
So I basically want to know whether this is correct and that the payments are at a fixed rate to the trust deed company for the 3 years?

GeorgeUK

I would advise contacting nationaldebtline about this.

I too thought that they were upposed to be able to negotiate with creditors as when he gets a payrise his payments should also increase. They may see the increasing of the 3 years as their negotiation, but unless they were willing to decrease this when he pays more then it's not being fair.

I think there are other boards on the forum that deal with trust deeds - they may be able to advise whether this is the norm or not.
http://forums.moneysavingexpert.com/forumdisplay.html?f=159

http://www.aib.gov.uk/guidance/publications/debtbankruptcy/bankruptcypostapril08/trustdeedguide/Q/EditMode/on/ForceUpdate/on/Page/14
http://www.aib.gov.uk/guidance/publications/debtbankruptcy/bankruptcypostapril08/trustdeedguide/Q/EditMode/on/ForceUpdate/on/Page/11

Choo_Choo_4

CS206 - I know that the laws in Scotland are different that the rest of the UK where we have IVAs ... whereby if same circumstances occurred in an IVA you would be able to renegotiate the IVA payment and a new creditors meeting may need to be called if the payments decrease by a certain % ...

However I am not sure if this is an option in Scotland - I think the full balance of the Trust Deed needs to be paid so if you drop in payments the term of the Trust Deed would increase.

Can I just ask how much your partner is currently paying towards the TD because if income has reduced by £150 per month it may be the case that the TD is no longer affordable and bankruptcy might be the better option - are you renting or homeowners?

laguna_1

i am close to embarking on a trust deed myself and ive been told that if ur income drops through the 3 years, ur term would increase to whatever it takes to ensure the creditors get the same dividend.

it would last the 3 years if u stick to the original monthly payment set up, any deviation below this would mean the term increases

laguna_1

in terms of salary increases, this is just seen an extra income for the creditors, so it would still mean 3 yrs in total.

all it would mean is the creditors would have extra income:-

good site for trust deeds attached:-

http://www.trust-deed.co.uk/forum/forum.asp?FORUM_ID=1

Antoine_Roquentin

Normally you would be extended to reach the same dividend. If the Trustee has a policy of Sequestrating if you can't make the payment then you would be back at the start of the three years again.

If he signed after April 2009 the Trustee also has the option of handing you back your entire debt and seeking his own discharge.

Be best to take the offer of extension in my opinion.