My friends husbands has a trust deed and has asked her to ask me some advice on a credit card he has, I'm unsure as to where he stands so I thought I would get your advice before responding. He entered a trust deed two years ago and including everything he owed money on, he did however keep an active credit card with a zero balance on it, he does now have a balance on the credit card, can he add this to the trust deed at such a late stage. My thoughts are that he can't as they were not included in the trust deed agreement originally but I would like to give him the correct advice. I have suggested he uses the forum if he gets the chance.
g giles
So far as I know, and I may well be wrong - any debts that were in existence when signing the deed can be added if they were forgotten due to genuine human error but any debts built up since taking out the trust deed cannot be added. In fact you shouldn't use any credit while in a TD.
Thanks for the advice, I think I may need to approach my response to my friends husband with care when explaining that you should not use any credit while in a trust deed if this infect the case.
g giles
Scotslad, I've just found an older post on here asking a very similar question, asking if using credit while in a trust is allowed, the response being that there is nothing to stop you using credit while in a trust deed, however it's not advised and could be difficult to maintain payback alongside TD contributions. It does not however explain if the new balance can be added to the TD but I don't think they can, hopefully an expert can clarify this and I shall then get back to the third party, I'm relieved I don't have to tell him he's done something really wrong with using the card.
g giles
There may be some limit on how much credit that can be obtained before having to involve the trustee. I'm sure it'd be quite a low amount. Might be worth seeing what one of the experts might say if they had a client in the same position.
Nothing left to discharge - everything's done and dusted!
Hi all
Just to clarify. The post trust deed debt CANNOT be added. Secondly there is no problem in terms of the Trust Deed in using the credit card after signing. I would certainly discourage it, but the trust deed does not have the same restrictions with credit as sequestration has. Any spend however is the responsibility of the individual to pay back.
Reminds me on an old story where a woman didn't pay First National Bank ( remember them!) for her new double glazed windows coz the salesman told her they would pay for themselves in 5 years!
Mark
Mark is not posting regularly in the Trust-deed.co.uk forum.
Thanks Mark, I did inform my friend husband today and he said he used the credit card to fund tax, mot, birthdays and Christmas and used his allowance for such things to pay the card each month, sounds fairly straight forward, I think the worry he had was whether it had to be added, I've put his mind at ease.
g giles