Hi whitey,

A very good question. There has been a lot of comment in this forum from people concerned about how the equity issue has been handled in their Trust Deed.

Our experts on this forum (Mark McFadyen and Kevin Mapstone) have in part been selected as their firms will put the equity position to you in writing at the start of the process to avoid nasty surprises later.

Does every firm do this? It would seem not by the comments made by others here.

If you'd like to talk through the issue with them (and how it might be handled in your Trust Deed if you go ahead) they are contactable via the profile pages on the left hand menu on this page.

Hi Whitey

There are a large number of posts where the equity poition is nil at the start and then the IP instructs a valuation on the 3rd anniversary.

The equity being protected? I will take a guess and say that you have been asked/advised to pay ?ú1,000 to 'protect the equity'. I won't name the company, but it's probably the TV one. If there is no equity, there is no equity and I would be wary of payments of any description in these circumstances.

As I always say, have the equity position confirmed in writing before signing anything as there are too many cases where the position changes and people are left to find considerable sums after 3 years.

Hope this helps.

Mark

Thank you very much for giving me your advice. My gut instinct is to stay clear of a trust deed and do a financial management programme instead which i have been told is my other option. This would take about 5 and 1/2 years to to with myself and fiance. When i have been on the phone to the advisor from gregory penington (who said it would be wilson/andrews that would deal with the trust deed) he does make it sound like a trust deed would be the best option as it would be 3 years. To be honest i am scared that i will have to end up selling in 3 years even if i get the equity position confirmed in writing just now. Then we will end up with nothing. So i am now thinking about going ahead with the management programme even though it is 21/2 years longer but atleast i'll have peace of mind our house is safe??? Any thoughts??
Thanks again,
Still confused and worried!!

Hi Whitey

The position with the property can and should always be confirmed before signing the Trust Deed and built into the proposal. In cases we deal with where no equity exists, we confirm this in writing before any documents are signed and confirm that the Trust Deed is on prepared on the basis that there will be no other valuations later. This at least gives peace of mind on the matter of the equity.

On the DMP, please check the costs involved and get assurances that this will run for 5 and a half years. There is a danger that this could be well in excess of this time if interest is not frozen. It also does not stop legal action by creditors.

Mark

Hi whitey,

The team behind this website have involvement with debt management plans as well as Trust Deeds and we therefore have a fair insight into the comparison between the options.

If, as Mark says, you get written confirmation in advance that the property will not be brought into the arrangement you need not have this concern provided you meet the other obligastions of the Trust Deed. The Trust Deed firms involved in this site work on that basis.

The estimate of the "term" of a debt management plan will be based on assumptions. This will likely include the assumption that interest and charges will be quickly frozen by the creditors. This happens in many instances but by no means all. If interest continues to be added the term will be longer.

A debt management plan gives no protection to your home if a creditor takes legal action against you because they do not accept the debt management plan.

A debt management plan probably will be more flexible. It will also result in full repayment of the debt which is important to many people. It doesn't carry the legal protection or the certainty of duration/term that a Trust Deed would provide you with.

Hi again!
Thanks for taking the time to give me some advice. We have now decided that a TD is the best option for us but are making sure we get the position of the equity in the house confirmed in writing before signing anything. What i was wondering was that as there will be a seperate TD for both of us can we witness each others TDs as the only joint debt we have is our mortgage?? It may be a random question but we both do not want anyone else/family to find out about the position we've got into as we don't want to disappoint them.
Thanks again

Hi Whitey

Yes there will need to be 2 Trust Deeds. Witnessing the TD shouldn't be a problem as the IP or staff who attends for the meeting will run through things and act as witness if required.

It is not considered good practice to have documents signed by family members.

Hope this helps

Mark