Hi,

I’m no expert but I would recommend just getting the ball rolling with the information you have given, ur trustee would not go forward with it if they didn’t think ur agreed payment was going to be enough to get it protected and that’s what the 1st stage will be about. As you said u don’t know what ur rise will be so once u do know then u can inform them, generous boss in these times. As far as I’m aware u are protected while ur application is being processed but again I’m no expert and someone else will probably confirm. Good luck.

Welcome to the trust deed forum Dman1974.

I don't think there's any need to report a salary increase to your trustee when you haven't yet received it and you don't know how much it will be.

It's important to understand that you're unlikely to benefit from this salary increase and the extra money will be added to your trust deed payment.

That could mean that a trust deed might not even be the best debt solution for you. For example, it's possible (depending upon your debt level and agreed monthly payment) that the salary increase make the debt arrangement scheme a potentially faster and cheaper debt solution for you.

Would you mind letting us know your debt level and currently agreed trust deed payment so we can see whether this might be relevant for you?

I can tell you're anxious to get things underway, but a "moratorium" could provide you with legal protection from your creditors while you wait to see what your pay increase will be and whether a trust deed remains the best solution. A moratorium can be implemented by your current trust deed firm (and most other debt solution providers) to buy you time and to get some reassurance that your creditors will not be able to take enforcement action against you.

Hi Dazzla359.

Thanks for sharing your thoughts with Dman1974.

There's actually no legal protection from creditors until a trust deed becomes protected.

This doesn't need to be an issue though because, if there's a credible risk of enforcement action, a moratorium can be put in place to prevent creditors from going ahead.

A moratorium is free and usually provides 6 weeks of protection from creditors while someone gets debt advice and then implements a debt solution.

At the moment the six week period is extended to six months under emergency Covid legislation.

Anyone reading this thread who is worried about creditor enforcement action should get in touch with an adviser ASAP. You can be quickly and easily protected from your creditors (for free) while you start to get advice and plan how your debts will be dealt with.

First of all I would like to say thanks to you both for replying. I appreciate all the support I can get at the moment.

TDA: Here is my debt level as requested. Sorry bit this may get a bit complicated.

Both myself and my partner were advised to both get trust deeds at the same time. We live in a mortgaged property which is partly owned by the local council (32.5%). We have been in the property just over 3 years and it was assessed by the trust deed company that we have no significant equity on the property so qualified for trust deeds.

My take home pay is £1900. I believe the pay rise may be anything from £100-£150 monthly.

We both have cars on logbook loans. Mine is currently worth £3,405. I still owe £2,758.00 and the repayments are £161 monthly.
My unsecured debts amount to £15,667 (3 credit cards and a personal loan for £7,940.00). Monthly repayments for al these are approx £350 monthly.

My partners take home pay is £1,316.00 and we receive £91 child benefit monthly.

My partners logbook loan is £8,338.00 and her repayments are £224 monthly. Her unsecured debt is £11,160.00 (one loan for £8,262.00 and a credit card for £2898.00. Her monthly repayments are £230 at present but the credit card is about to move out of its interest free period).

A complicating factor is that due to the value of my partners car (we both require cars for work/picking up kids etc) it has been deemed that her trust deed will last for 5 years.

We have one 4 year old that lives with us fulltime and I have two older kids (12/14) tht stay 2-3 nights per week.

The paperwork arrived yesterday and I guess we were a bit naive when signing up to this as we hadn't realised any pay rises over this period would get absorbed into the trust deed (it certainly wasn't explained to us). In my partners case this obviously would have more of an impact given the 5 years. As her level of debt is less than mine but her trust deed period is longer. We both do very tough jobs (nurses) and the thought of slogging away for 5 years with no rise in wages from promotion/new jobs etc has got my partner reconsidering the whole thing. She could potentially end up paying way more than the actual original debt so I understand her way of thinking. The issue is, if we don't enter into it together I don't think we will be able to afford the whole thing at all. Thins would only leave us with a couple of hundred a month to put aside for car repairs/kids christmases/birthdays/and anything else that may crop up but with no option for credit if something goes wrong. Terrifying.

We are completely confused as to what to do next. Would a repayment plan be a better option? The thought of signing away my life for the next 4 years is pretty daunting.

Again, i appreciate any advice. Sorry if some of this doesn't make sense. Not much sleep last night through worry. If you require further info please let me know.

Hi Dman1974.

Thanks for sharing all of this information; it's really useful.

Trust deed payments are based upon an affordability calculation. This is basically total income minus your bills and reasonable expenses. If your income increases without any increase in your bills (or reasonable expenses) you can expect the trust deed payment to increase. If your bills do increase (which they tend to over time) an extra allowance will be made to cover them.

Can I check about the cars please? You mention logbook loans, which are usually taken out against a car that you already fully own. Is that the case here, or did you obtain the cars on finance (like hire purchase) in the first place and this is what you're continuing to pay now?

In terms of your proposed trust deeds, how much are you each being asked to pay if you go ahead? This will help us to compare your options in terms of cost and duration.

By the way, it's perfectly common for couples to each use a different type of debt solution. In certain circumstances this can help a household overall to become free of debt sooner, at less overall cost, or with reduced complications.

Hi TDA,

We obtained the cars on finance. I'm not sure why I thought this was called a logbook loan.
My payment to my trust deed will be £165 monthly and my partners will be £140. This was saving us about £300 monthly. At the moment we are getting into debt on cc's every month make ends meet.

Thanks again for your help.

Hi Dman1974.

Will your wife's finance end during her proposed trust deed and the car will then become hers? How long is left on her finance agreement? I'm wondering because the car is apparently being treated as an asset, but if it's on secured finance it isn't an asset now because she doesn't own it.

The main repayment alternative to a trust deed is the debt arrangement scheme (DAS). You can read more about it at https://www.trust-deed.co.uk/debt-arrangement-scheme.html. A user has legal protection from creditors and interest and other charges stop. No debt gets written off however, so depending on debt level and contribution level these arrangements could be longer than a trust deed. Another difference is that it isn't mandatory to pay your full disposable income into the debt arrangement scheme (this is mandatory with a trust deed) so your budget is likely to be a little more flexible.

With £15,677 of debt and a £165 payment your DAS would be quite long (just under 8 years). If your payment could be £265 however (with the pay increase) you could clear the debt in just under 5 years (so not vastly longer than your trust deed).

Your partner has £11,160 of debt and a proposed trust deed payment of £140. A DAS on these terms would run for around six and a half years, so again not greatly longer than the proposed five year trust deed.

You can enter a joint debt arrangement scheme together. With £26,837 of debt and a combined payment of £305 the debt could be cleared in full in 7 years and 4 months. If you added a £100 pay increase into the mix (with a combined payment of £405) the debt could be cleared in around five and a half years.

If you expect further pay increases and promotions in the next few years this option does seem worthy of consideration. You could potentially increase the repayment rate and have a little more flexibility with your household budget.

The other thing about DAS is that your assets (house and car) are irrelevant because this is not a personal insolvency process.

Wow thanks for this. This option feels way more suitable. lot less like we are signing our lives away for the forseeable future.

Would it just be a case of picking a company to set this up for us nd quoting the figures in this post? I'm not sure Im keen to go with the company that set up the trust deed. I feel they may have rather shunted us towards this option without properly explained the other potential choices.

Hi Dman1974.

You can choose whoever you want to use to handle DAS for you. If you wanted to contact us we can connect you with our recommended experts, and there are plenty of other good firms and agencies out there who can also take care of this of you.

The fact that you've thought through your income and expenditure and have listed all of your creditors already means that this shouldn't be a long or difficult process.

Thanks very much for all your help. You have been great. I think I will probably sleep somewhat better tonight.

That’s lovely to hear Dman1974.

Thank you and sleep well.