Hi madwife1

You are worried and rightly so. A ?ú500 bond? This appears to be the practice with some IP firms where there is no equity in a case and the individual makes a ?ú500 payment. This basically stops any further valuations being carried out if the property value were to rise through the period of the Trust Deed.

As matters stand, there appears to be equity in the house and therefore the ?ú500 payment is a nonsense. I see no reason why (edited) are involved and not the IP directly.

In all cases you should seek a meeting with the IP or one of his/her senior staff and discuss the options available and discuss exactly how matters would be dealt with. This should then be confirmed in writing before signing anything and certainly before paying anything.

Regarding the valuation Zoopla is likely to be higher as it compares local sales. A Trust Deed valuation is generally lower. Also keep in mind that the equity, if any, is half if the property is jointly owned.

Hope this helps. If you need any further advice, please ask.

Mark

Thanks for your reply. Should I consult with an IP now? Will they charge me upfront for a survey as I can't afford this, to be told our house is worth too much then not enter into a TD.
Also, if I did enter into a TD therefore having a shortfall of say 20K at the end of the deed, how would I raise this cash as the mortgage companies would laugh me off the planet.
I can always stay with CCCS but account balances are going up on 3 of the creditors - all RBS.
I am really confused, anxious and feel that, due to clinical depression, I lost almost 1 year off work and have let my family down with compulsive spending to overcompensate for other things.

Also Mark, the introducer from (edited), when I said house was worth approx 220,000 (which is probably more like it) - he said that they would make sure that survey showed no equity. He made it sound that this, along with ?ú500 bond would have me home and dry in 3 years.

Hi madwife1

If a comment were made such as 'they would make sure the survey showed no equity' it could be interpreted to constitute fraud. My advice would be to avoid any company like the plague if they made such a statement and even go so far as to lodge a formal complaint with their governing body or the governing body of the IP if he/she is willing to accept such a report as valid in a Trust Deed.

Mark

Hi madwife

I meant to say earlier, it may be an idea to obtain redemption figures for the mortgage and secured loan as at least this will give you a true indication of what is outstanding against the property and give you a starting point at least.

Mark

Hi madwife1

Please make sure that you get everything in writing before you proceed, particularly in relation to the equity in your home. Do not make any upfront payments.

If you proceed with a Trust Deed, and there is equity in your property, your share will require to be realised, one way or the other, for the benefit of your creditors. Have you tried remortgaging your property to release the funds you need to pay all your creditors?

Another option that you may wish to consider is the Debt Arrangement Scheme. The equity in your property would be protected and the interest on the debts would be frozen. If you continued making monthly payments of ?ú390 you could pay all your creditors in full in just under 7 years.

Julie

thanks Julie, nobody would touch us to remortgage. is a DAS the same as a DMP? Also who pays for the initial survey of our property if I did approach an IP? The RBS refuse to freeze interest on debts.

Hi madwife

a DAS is similar to a DMP except the interest is frozen and it would exclude the house. You would need to repay the whole debt though.

On the subject of the remortgage, you would need to fund this beforehand if you were looking at a Trust Deed, however if you sign a Trust Deed, then the IP would cover the cost. I know, its a bit of a catch 22, however I think the property is the main issue and would be worth having this carried out to fully assess the equity.

Mark

Hi madwife1,

DAS is different from a DMP in a couple of ways.

It will mean that no more interest is added... and it will provide you with legal protection.

Similar to a DMP repayment will continue until the debts are cleared so the duration could be quite long.

The costs of a valuation are normally met from the contributions to the Trust Deed so you would not pay directly. However this valuation is normaly instructed after the Trust Deed is signed so you would not have certainty at the time of signing.

If you wanted to go down the Trust Deed route you could ask the selected firm which surveyors they use. It may then be possible for you to instruct the same firm of surveyors (before signing a Trust Deed) to carry out a valuation which could then be used for the Trust Deed itself if you went ahead fairly soon afterwards. This would give you certainty but you would need to find the money to instruct the valuation.

One way to get a guideline valuation is to call a couple of local estate agents and ask them to value your property with a view to a "quick sale" (rather than the sometimes slightly inflated valuations some estate agents provide to try to win your business). A quick sale valuation may be similar to a Trust Deed valuation. At no cost you may then feel better informed about making a decision.

Don't understand Mark - when you say about remortgage that I would have to fund this beforehand. Do you mean a survey. I was asking how I would be expected to raise the shortfall due at the end of the 3 years on the TD without selling the house. For example Julie suggested a local estate agent's value for a 'quick sale'. Say this was 220K, mortgage and secured loan 170K. This would leave 50K equity of which 25K would be mine. My debts are 32K. How would I raise the money after 3 years and would they expect repaid given those approx. figures. I am going to get settlement figures sent out for both secured loans.

Hi madwife1,

I think that is a typo by Mark and he meant valuation rather than remortgage.

thanks - re the figures - would they, at end of TD take my share of equity of house at todays value and, if so, how would I remortgage?

This seems to get handled in different ways by different Trust Deed firms which is why you'll find threads on this forum where serious confusion and problems have arisen towards the end of the Trust Deed.

Those involved in this site advocate:
1 - Getting in writing from the Trust Deed company (before you sign) how any equity will be dealt with.
2 - Working with a company who will do a valuation at the start of the Trust Deed which will form the basis of your commitment at the end of the Trust Deed (you'll already have this in writing).

Nobody knows how the mortgage market will be in three years time but the honest answer is that it may be difficult to remortgage (it certainly would be at the moment).

Alternatives could be making further contributions in lieu of the remortgage, or securing help with a lump sum from a third party. Whether either of these alternatives is either viable or sensible clearly depends in part on how much equity there actually is.

Hi madwife

sorry a bit of a typing mistake. I think the important bit is assessing exactly what the equity position is and then having this discussed and agreed with an advisor before you sign anything.

Also I meant to mention if the overdraft if in joint names, the bank will look to your husband for the full amount, not half.

Mark