Hi gillymac25,

My reading of your post is that you currently are making reduced payments to some of your creditors via a debt management plan and are making full repayments to friends/family who took loans out for you?

In a Trust Deed all debts (that exist on the date of signing) would need to be included. This might bring your friends/family into the equation if my reading is correct?

I don't think there would be an issue in identifying a gift from parents as opposed to normal income sources on your bank statements.

With regard to the company that you mention one step that you could take is to check whether they have a Consumer Credit Licence. Providing debt advice without one is likely to be an offence. You can check on any debt advice firm at:

http://www2.crw.gov.uk/pr/default.aspx

Hi gillymac25

The issue of debt to friends/family is a complicated one. Technically they should be included as creditors in the trust deed as trust deed assistant says, though they would need to make a claim and provide evidence of the debt too in order to receive a dividend via the trust deed.

However, usually people prefer to leave family/friends out of the equation and in practice this isn't really a problem due to the informal nature of the arrangement with them. They would effectively be waiving their right to repayment of the debt, though there is nothing to stop you paying them back once the trust deed has finished if you choose to. Crucially though, the payment of debts wouldn't be allowable as an item of expenditure in your monthly budget, so you couldn't pay them back whilst in the trust deed (though I guess there's no reason your parents couldn't pay them instead if they are willing).

I'm not sure I've explained that very clearly! Sorry Gillymac25!

What if I had a loan from my company before I took out a trust deed, does my trustee have to know this? I would think my company would be annoyed if I were to reduce any payment.

Yes, I'm afraid your trustee has to know about any debts you have perston. When you say your company, do you mean your employer, or a company you are director of?

Hi there,

thanks very much for all of your replies. I think that maybe my parents paying the debts would be a way round it - there is no way we couldn't pay them as they were taken on in good faith and I wouldn't be able to live with myself. Can I also ask about a guarantor loan that we got a few months ago? If we don't pay this our guarantor will have to pay and I can't let that happen. What will happen to that?

My main concern was the fact that my parents are depositing cash into my account on a regular basis - I was worried that the Trustee would then add that on as income and we would end up having to pay more. Would this be the case?

Thanks,
Gillian.

Thanks Kevin,

It is my employer that I owe money to, is there any way I can get round this?

Hi gillymac25,

If the contractual payments to the guaranteed loan stop there is every likelihood that they will seek payment from the guarantor.

Presumably the Trust Deed would pay off some of that loan but the lender would be well within their rights to seek the balance from the guarantor.

I don't think that there is an issue with the help that your parents have provided to date. They are choosing to help you and could just as easily choose to stop making the payments. I therefore don't really see how or why this would be treated as income though it might be useful for one of the experts to confirm or reject this so that you can feel sure.

I would take the same view as trust deed assistant - the payments from parents aren't earned income and wouldn't be treated as such.

Re perston's question, I'm afraid that as the legislation stands all debts must be disclosed to the trustee and they have an obligation to treat each creditor equally so your employer couldn't be treated any differently.

Thanks Again Kevin,

The loan was for company expenses, ie fuel/hotel costs as my credit cards were no longer in use so would this be treated differently?

Do company expenses not get reimbursed to you anyway perston?

Yes they do, but I needed money up front as my expenses could run into ?ú1,000 per month hence the use of a credit card. I now use this as expenses only account with a debit card.

So effectively it's an advance against your work expenses which is quickly repaid via the submission of receipts perston?

Mmmm well not really, I was given an advance 10 years ago when I started with the company but it's amazing how it goes. As the company does not supply company credit cards we all have to use our own. Since I do cannot use credit cards anymore I needed a "float" to keep me working. Do I win the subject of the week?

If it can be argued that this debt is merely a form of advance on your wages then I guess it could be excluded from a trust deed.