Hi Pamjo.

In what circumstances do you envisage that happening?

It might be best to start a new thread to cover this as the subject is quite different to the one mainly being discussed here.

I've had a few thoughts after my meeting with Kevin and was wondering if those already in a PTD could shed their experience on.

I was just wondering did you keep up with all payments to creditors prior entering a TD or did you cancel payments knowing that you were entering into one? If so were there any consequences into doing this? We did talk about this during the meeting but I just wanted to see what other people had done. Part of me wants to continue paying till I enter the TD purley out of the fact that I feel bad that I'm unable to pay back what I owe. However on the other hand the extra money could act as a small buffer in case of any future problems.

As always thanks in advance for replys 🙂

Hi Headwire

I know you were looking for people who have been in trust deeds to answer you, but in the meantime I just thought i would let you know that the majority of people do stop there payments. Once you have decided that you are going down this route, the Trust Deed can be signed fairly quickly. The money you pay inbetween in really jus wasted, it will make no differnce to your creditors decision. You will get letters etc from creditors, so it depends if you can put up with that for a few weeks?

Thanks for the reply Shona. I thought that would prob be the case. I'll most likely do it this way, as you said the money would be wasted otherwise. I think I'm just gonna find it weird not paying it to them. I take it they can't inforce non payment charges on me?

Sorry I didnt catch up with this earlier.

We were up to date with everything until we met with RSM tenon and decided on the trust deed. As soon as we decided on the trust deed we stopped paying all our unsecured creditors,and out some money aside as a little contingency fund to use during the trust deed.

Anything you do pay to creditors while a trust deed is being set up will be gobbled up in interest and charges and they will hassle you with phone calls and letters whether you make token payments or not.

They can add charges until the trust deed is set up but at the end of the day if you are using credit to survive and the trust deed is your best option a few extra charges wont matter one little bit!!

Paul

Thanks for the advice Paul, its good to get points of view from all angles. Just out of curiousity, if you don't mind me asking, do you know how much your credit score has gone down since entering the TD? My only concern for the future in securing a mortgage for when we want to stop renting. I know it will take a massive hit I was just wondering how much.

Don't mind me jumping in but your credit score will be so bad it's not worth worrying about. Nothing you can do about it until you're out the other side and then there are lots of things which will help repair it gradually.

In the meantime, I would suggest you might consider opening a credit union account to stash any spare pennies away for an emergency contingency fund. You can also use it for the contingency part of your Trust Deed expenditure (i.e. the monthly amount for ongoing car / house repairs, etc). This will stop it being inadvertently frittered away and the regular saving habit will stand you in good stead with your credit union should you need a small loan during or soon after your TD while your credit score is such that a bank loan or credit card would be unavailable to you. Be up front with them and they'll do all they can to help you through it.

Hi Headwire.

In terms of choosing the point at which you stop paying your creditors directly I always think it's worth seeking and following the advice of your own trust deed firm.

There might be non-payment charges, but this will just add to the balances that are going into the trust deed.

As Shona says, I think trust deed firms commonly advise clients to cease paying directly once they are committed to going ahead with the procedure.

In terms of getting a mortgage in the future your precise "credit score" isn't that relevant in isolation.
For example, you could have a decent credit score if you had £50000 of debts and had never missed a payment. When a mortgage lender looks at the situation though they will also consider "affordability" which will be diminished greatly if you have large debt commitments.
Likewise you may rebuild your credit score quickly after a trust deed, but if you have insufficient deposit you'll not be able to get a mortgage.

I do like uncleben's suggestion of saving via a credit union. I think they have a massive role in helping people get back on their financial feet after debt solutions, and also in helping to encourage good financial habits.

My credit score went from the high 900's down to below 200. Since completing recently its doubled to 400. Its not important until the 6 year point when my trust deed and defaults drop off.

Paul

That's a great idea about the credit union, I've already started to look into it. Is it better to take one out once into the TD? Just worried that if I do it before it may get closed when they find out I'm in one.

Going back to the subject of stopping payments prior to entering the TD, I can't decide whether I should do it, then start the TD beginning of next month or leave the TD till the following month so that I have a bigger buffer of savings? I'll discuss this with Kevin on Monday but any thoughts would be appreciated.

Sorry I feel like I'm hogging the forum, just so many questions keep popping into my head.

Hi Headwire.

If you have significant savings at the start of a trust deed you'll be asked to pay them into your trust deed. They will be an asset that can help to repay your creditors.

If and when you're sure a trust deed is the right thing to do I'd suggest getting on with it so you finish sooner.

Regarding saving with a credit union, I'd say to talk to one of them and explain your circumstances so everyone knows the situation from the start.

Thanks for the reply TDA 🙂

How much would be regarded as significant savings? or is it different from case to case. If I stopped paying my creditors for 2 months I would save roughly £1000, would this be regarded as enough of an asset and paid into the TD? I'm just trying to make sure I have a small amount set asside for any emergencies etc. My car is due for an MOT soon and I've got a funny feeling it may need some work so I'm worried that if I enter into the TD and then get hit with a repair bill, I'll be stuggling.

Hi Headwire.

Speak to your own contact, but I think a sum that size is likely to need to be paid over. Technically any savings vest in your Trustee when you sign.

Will do. Thanks for the advice TDA.

We had managed to save £400 prior to our trust deed starting and that was fine!!

Paul