There are no rules about getting further credit but if it gets out of control it can't become part of your Trust Deed. You may want to run it by your trustee though in case they query how you have the means to pay back other credit. If they think you have too much disposable income they may want to increase your contributions.

Hi mondayblues,

Like upstream has advised there isn't anything preventing you from having credit whist in a Trust Deed. It's the managing the credit and paying the balance off that can become an issue.

There is guidance to say that someone should be allowed to have a proportion of their disposable income of up to 10% for a contingency allowance. This would be set at a maximum of £20 per month.

I think it's about trying to find a balance between having emergency money and at the same time not building up thousands in savings. If you have a car for example then come MOT time the bill could run into hundreds of pounds.

We encourage our clients to consider a savings account with their local credit union and anything under £1,000 in savings we are happy for the clients to use as emergency contingency money for unforeseen bills. It means that if a client does have some emergency savings they won't need a payment break. If they don't though then we can still consider this.

Like you say it's about living in the real world and planning.

Thanx for your help so far. We havent really confided in anyone about situation but I do know someone who was in a trust deed and was very relaxed about applying for things whereas I am very conservative and worry about the trustee all the time. This person said would do no harm to get a loan or a small credit card, and vanquis keep posting invitations through letterbox... Life is very tough and we sail close to the wind, difficult funding a family on the money that's left at end of month. Having a contingency, small amount, would be so handy, however we were told by trustee no savings, no credit unions, no credit, and live in fear of whether they would find out and end our trust deed. One year to go! We have never been late or anything go with our payments incidentally.

Hi mondayblues

I suspect your trustee was offering advice on to try & keep the finance balanced through the trust deed period as there are no regulations against obtaining credit. I don't think it would be a wise move for them to review an income and expenditure, agree a contribution and then try and alter this if you managed to save from any contingency amounts

A trustee needs to take a balanced view at all times as it hardly seems fair to some that in 2 identical income trust deed cases, one can be paying rent of £700 and the other £400, therefore one contributions is less than the other.

We all work within specific expenditure guidelines laid down by creditors, however as you say, there should at least be a greater flexibility with the trustees approach.

Mark

Thanks very much mark your response is very helpful. I am assuming that they lay down the law (or what they wish to be the law) at the outset to prevent people from defaulting on their agreed contributions and to make those who perhaps wouldn't take the TD Seriously, take it seriously. In other words 'toe the line'

Possibly mondayblues. There might also sometimes be some confusion with other types of personal insolvency in the UK which very clearly ban or restrict further use of credit.

It's also a risky path to go down. There have been plenty of posters here in recent years who have explained that further credit use has left them in desperate trouble.