Hi Mark.

Do you think that something has changed with the proposed introduction of a minimum four year protected trust deed term?

Hi TDA

I'm not sure as the update was fairly brief.

I'll dig about and see what I can find.

Mark

The new draft regulations are out - and the minimum 4-year term is still in there I'm afraid. To summarise the main points:

- Minimum debt level £5k
- Minimum 4 year term
- Cannot do TD if sufficient disposable income to repay debts in full within 4 years
- Common Financial Statement must be used to calculate disposable income in all cases
- Equity agreements to be made at start of TD based on valuation at time of signing
- No longer required to place notice in Edinburgh Gazette
- Existing earnings/maintenance arrestments cease to have effect once trust deed protected
- If 2 consecutive contribution payments missed, payments can be enforced direct from wages via employer
- Increased powers for AIB to direct trustees
- Cannot take contributions from social security benefits
- Trustees must fix level of fee at start, with additional fees based on percentage of realisations

All in all, a bit of a mixed bag for those in debt.

When might this come into effect?

Or to put it another way, by when should people considering starting a trust deed act in order to have a chance of it being a three year rather than a four year process?

Due to come into effect on 28th November 2013 - so less than three months now. As you say, trust deed assistant, for anyone thinking of entering a trust deed it may be wise to act sooner rather than later to avoid having to pay for an extra year.

The AIB are running roadshows before November to allow for any final questions etc, although the proposed changes are not as drastic as some anticipated.

Our policy pretty much covers what's being suggested, so hopefully will only need a few tweaks here and there.

Mark

Trust deed firms being able to take payment direct from wages is a bit worrying

Hi fcwalker.

I'm sure that will be used as a last resort where communication has broken down and/or a client is being unreasonable (in the view of the trustee obviously).

Some firms take an equivalent (but presumably more expensive) step already using the legal process and earnings arrestments in similar serious circumstances.

I tend to agree with you fcwalker. I don't really understand the need for this as a trust deed is meant to be a consensual arrangement and if an individual decides not to cooperate then there is already a remedy -it can be terminated without the debtor being discharged from their debts, or the person can be sequestrated.

The risk from bringing this in is that the power is not just used as a last resort but instead becomes the first port of call for some trustees if there are any payment issues at all, whether justified by circumstances or not.

I wish I could be as confident as Trust Deed Assistant that this won't be the case.

It worries me as there have been several mistakes made by my trust deed provider and I could see them deducting payment from my wages "by mistake"

There is a section in the current Trust Deed doc which allows the Trustee to fix an amount. This reads:

In the event that we are unable to reach agreement, I confer upon my Trustee, acting reasonably on the basis of the information available to him, the power to issue a Certificate fixing both the sum due and payable by me by way of contribution, and the dates of payment. Such Certificate shall constitute an assignation from my income and not a decree for payment of a periodic sum and shall have the same force and effect as an order by the Sheriff.

Mark

Hi fcwalker

I think the potential for seeking payment directly from your employer would be only as a last option in terms of the new regulations.

In my experience 99.9% of cases pass without issue and on the basis that mistakes are made and can be demonstrated by both parties, then things can normally be resolved.

Mark

Are there also proposed changes to the terms of sequestration and would it be the same timescale?

Welcome to the forum Grace.

It may not happen at the same time, but I believe payments (where affordable) will also change to four years for sequestration.