Welcome to the forum NoMoreCredit.

Unlike in a debt management plan, your assets are taken into account in a trust deed (or trust deeds). That means you'll be expected to pay over the value of any equity that exists in your home. Many people used to do this by remortgage but that's all but impossible in the current mortgage lending market.

Where the amount of equity isn't huge it may be possible for a third party to pay over the sum, or for additional monthly contributions to be made that will cover the sum (but usually only where this can be done within a reasonable timeframe).

Has a valuation of your property taken place yet?
If it hasn't it's hard to understand where the idea that an extra year will suffice comes from. The extra period will depend on how much equity there is and how much you will be paying each month. Until the valuation is done any projection can only be an estimate.

How much are you paying into the DMP at the moment? Is it proposed that you'll be paying the same (or more or less) to the trust deeds?

Hi nomorecredit

Have you sat down and spoken with anyone?

If not, I think you need to seriously look at the position with the equity before doing anything and ensure you have this confirmed in writing before signing anything.

Regards

Mark

Hi nomorecredit

I can only agree with TDA and Mark - you have to give this serious thought. You need to sit down with someone, and know exactly what you are signing up for. as TDA says, how can they estimate an extra year for your equity, when they have no idea how much the equity is?? Before you sign anything please sit down with someone; make sure the valuation is carried out first and get in writing how the equity is to be realised. Yes, it can be paid for at the end, but you need to know how much it is first - you don't want to go from one mess to another, particularly where your house is concerned.

Hi,

Many thanks for your replies. They are helping to confirm my discomfort with the information we have been told so far.

I guess they are going by the information we gave them - given that we only bought our current house last March and provided a mortgage statement from this March I guess they have presumed the value hasn't changed much. We bought the house for £16200 - the balance is about £145,00 so actually more equity than I thought but what figure would be used for value? Is there a remortgage figure we should be using?

Our debt is in excess of £60,000 including both car loans. We both earn around £31k per year so do have money to pay back.

They mentioned the not having to remortgage in the sales call and also stated an amount our monthly payment would be (although this is not the final amount) - this was all before knowing anything about our financial situation - this has made me dubious from the start.

They have reduced the monthly payment from what we were paying to DMP and have included our 2 car payments as they think they are loans instead of hire purchase, however the student loans which were part of our DMP still need to be paid on top of this.

Who should I speak to for advice?

Many thanks for your advice. I am not 100% sure about what we are being told so it is helping to hear what others think.

NMC

Hi nomorecredit

You called it right when you said it was a sales call.

The house is paramount to what you do and I think you need to sit down face to face direct with an ip firm who will fully clarify the position on each matter. That way there are no doubts. This is all about you retaining some control and having no unknowns.

Mark

Hi NoMoreCredit.

It obviously varies from area to area, but in general I think property prices have slipped downwards during the period since you purchased your home?

A trust deed valuation would normally be at the lower end of expectations as well.

The figure used for a trust deed will be based upon a valuation instructed by your Trustee. Some trust deed firms may offer a desktop valuation in advance of signing that gives a decent indication of current value.

Please don't get too preoccupied by whether or not you'll need to remortgage; as things stand if you are in trust deeds an equity releasing mortgage is pretty much non-existent. That doesn't mean that any equity that exists doesn't have to be paid over though, it does and other means to do so will need to be found.

The car loan documentation will need to be reviewed to confirm whether the loans are secured on your cars or not. If they aren't secured they will be included in any trust deed.

Stating an amount that you'd have to pay into your trust deed without doing a factfind exercise is ridiculous; they might as well just pick a number at random. Without any information they've said that you'll pay less than you are in your debt management plan AND you will not have to pay your car loans any more!!! It's great that you've seen through that.

If you want to get further advice I'd suggest speaking to another trust deed provider, a Money Adviser at your local CAB or Local Authority, or a debt adviser who is qualified in debt advice rather than salesmanship. Seeking multiple source of advice is always a good idea; a trust deed (or any other debt solution) is a major decision that should only be taken when you are 100% sure of the options open to you and the benefits/drawbacks of each as they apply to your unique circumstances.

You circumstance sounds similar to mine.Whatever you do sit down with someone face to face and sort equity out from the start. I was very worried about equity and got it sorted before TD was signed. following months of reading threads on here i eventually contacted Marks firm.I have to say i would have been happy to contact any of them as info seems clear and concise.the only variation i noticed, which was important to me ,was the £5000 potential waiver in equity which some of the companies factor in with regards covering potential costs of selling property should worse case arise.I guess if you read enough and ask enough questions you will be able to make an informed decision and the process will be straightforward.It doesnt need to be complicated if all facts are clear before signing.A trust deed survey is different from a regular survey and you may be surprised at what your house is worth.this is the one time you want a low valuation as it confirms everything and leaves no room for surprises..I signed 2 weeks ago and am confident that everything was covered and know it was the best option for me......only 35 months to go !!

Hi No More Credit

I am glad that you are thinking twice about signing with a 'sales' firm. Trust Deeds are a great option for people, but you have to be 100% sure of what you are doing, and what is expected from both parties. As cal says some firms do offer a £5,000 discount in your equity to offset any costs that would be incurred with selling costs. Creditors are aware of this from the start, and have no problem at all. As Mark says, sit down with someone, so you have no hidden surprises, Everything should be in writing before you sign the Trust Deed.

Hi, I was in a similar position and found myself getting advice from companies after completing an online query to find out what debt solution would suit my needs. I nearly signed up but something didn't seem quite right and I wanted to speak to someone in person. Even then I spoke to at least 2 different people before signing my TD with Shona's company. Take as much time as you need and get everything in writing before you sign. It took me 4 months to find someone I was totally happy with. Good luck

Hi All,

I have just been reading these threads, I am now getting a bit worried again as I don't know if everything was sorted when we went into our trust deed, we didn't fully understand the whole thing at the begining. I will need to check our paperwork, also still worried about the equity.This we will need to get sorted,I may end up phoning you for advise, although I know that when we complete we know we will be debt free, which is a very positive thing.Although at times it has been very dificult and trying, but try to keep focused at the glimmer of light at the end of the tunnel.

Hi lorrainek.

Reading through all of your trust deed paperwork is a good idea.

Everyone here is happy to try to help you but the best starting point, if you have any questions about the agreement that you signed, is to speak to your contact or to write to your Trustee for clarification. Trust deeds aren't all the same and the office of your Trustee should be able to provide you with information that is specific to your case and trust deed.

Hi,

Thanks everyone for your advice.

My gut instinct is not to go ahead with the Trust Deed. We are going to wait until January when we will have been in the DMP for 1 year and see what those creditors not stopping the interest do then.

We have been a bit lazy with the DMP and sat back and not communicated much with some of the creditors that we need to be asking to reduce/stop the interest. I intend to get back on top of it and help myself.

If it looks like they are not going to reduce/stop the interest much we will contact a recommended company re: trust deed and review our options again.

Something just isn't sitting right with me re the Trust Deed company right now so we are definately not rushing into anything.

Many thanks once again - the support on here is great.

NMC

Hello NoMoreCredit.

I'm glad that you have found the site to be useful. Thank you for your kind words.

It's a good idea not to rush things; as I've said many times in this forum it's much better to make a good decision than to make a quick one that you later regret.

If the issue of interest being frozen in your debt management plan is your main issue you may wish to review the Debt Arrangement Scheme as well as trust deeds. Interest will be frozen if creditors accept it and your home will not be a factor. There is a little more information at:

http://www.trust-deed.co.uk/debtarrangementscheme.php