Welcome to the trust deed forum juliet.

There are a couple of possibilities why the CAB adviser might have had concerns about whether a trust deed might become protected.

I assume that you worked through your income and expenditure with the adviser? If so, how much "disposable income" (the amount you might pay into a trust deed) was there after your costs were covered?

Are any of the other three accounts (in your sole name) with Natwest?

If you have this information it will help the experts either understand the CAB advisers concern and explain the reasons behind it, or reassure you that in fact there is a realistic prospect of a trust deed working out for you.

Hi

None of the other debts in my sole name are with Natwest and the amount of payment worked out was £170 pcm.

Thanks juliet.

What's your feeling about the figure of £170. Does this seem affordable to you? If yes, do you think you would be in a position to pay any more and still be able to live reasonably for the duration of a trust deed?

I suspect the adviser at the CAB was a little worried about whether, after the trust deed providers fees and costs were covered, sufficient money would be left to repay the creditors an amount that would be acceptable to them.

I am happy with £170 and told the CAB advisor that i could stretch to £200 if need be.

I just want it sorted and dont really want to go down bankruptcy route due to my job.

Why would Natwest refuse it, surely if i had to go down bankruptcy route they would be getting the same amount of money from me?

The cab advisor was talking of £0.10 in the pound for the trust deed?

Hi juliet.

Enough of the debt total is with Natwest for them to be able to prevent the trust deed from becoming protected if they chose to. However Natwest aren't known for being anti trust deeds.

The 10p in the pound is often a bit of a red herring. The guidance to trust deed companies is that they should only take on a case where they expect to be able to deliver a 10p in the pound dividend to the creditors.

This becomes a red herring because if people can afford to pay more they will need to, and also because if people cannot afford to pay enough to generate a 10p in the pound dividend they should not stretch their figures too hard to do so as the trust deed is highly likely to fail later on.

When working out the 10p in the pound you need to deduct the costs/fees of the Trustee from the total that you pay into the trust deed. Lets say you pay 36 payments of £170, this will equal £6120. From this you then need to deduct the trust deed fees, the costs/outlays, and the Vat. The amount left over will be available for creditors.

As your debts are around £34000, a Trustee will need to expect to be able to repay £3400 to creditors after their fees/costs/Vat have been deducted. Based upon a payment of £170 per month for 36 months this all looks extremely tight.

I can therefore understand where the CAB adviser is coming from however, I think a trust deed probably will be available to you assuming that you:
1 - Find a trust deed company with low fees and/or
2 - Consider whether you might be prepared to sign a trust deed that lasts a little longer than the usual 36 months and/or
3 - Up the monthly payment (perhaps towards the £200 figure you mentioned) but only if you're sure you can afford to.

Hi, thanks for your advice.

I just cannot see any reason for any creditor to refuse the trust deed, they will presumably get the same amount regardless if its a trust deed or bandruptcy, as i said i could stretch to £200 a month at a push, in your opinion would this a more reasonable figure for Natwest to agree to a trust deed?

Hi juliet.

I think it would be best to wait to hear what our trust deed company representatives have to say. They work with all of the major creditors on a day to day basis so have an in-depth knowledge of what all of them are (and are not) likely to accept.

Hopefully one or more of them will get chance to visit the forum and comment soon...

Hi juliet,

Trust deed assistant is correct with her calculations - a trust deed should certainly be possible but you may have to offer to pay over a longer period in order to get the agreement of creditors.

Natwest, in common with many other creditors, do have a minimum expected return and will reject trust deed proposals if it doesn't meet that. So I'm afraid it means that either you have to meet their criteria and probably pay over a longer period to do so, or sequestration might be the only other viable option.

I think you would be wise to speak with an insolvency practitioner to look into the options further, either through this site or via another insolvency practitioner that you may have been recommended.

Hi Juliet

From the information available, you have combined debts of ?é£34000 and income is minimal.

I think the advice to look at sequestration is good advice. The creditor you refer to and possibly the other will work on certain guideline as to whether or not to accept the Trust Deed. Likewise an IP will also need to follow best practice when advising on options.

based on a 3 year Trust Deed, I dont see how it would be possible at ?é£170 and even ?é£200 which you advise would be a stretch. There is the possibility of extending this to meet the criteria, however I dont think a 4 or 5 year Trust Deed is the best option, when sequestration is likely to deal with the matter with minimal or no income payments.

Mark

Hi, many thanks for your replies, I understood it that under bankruptcy i would still have to make payments over a period of time? is this not correct?

Hi juliet

The general guidance is that if you are in employment, you should make a contribution, however it is difficult to assess without an inc/exp.

Mark

That contribution may well be assessed in a similar way to the manner in which your CAB adviser did it juliet. It would be paid for three years if there was a contribution to make.

As such it appears likely that bankruptcy would resolve your debts sooner than a trust deed, and possibly with a little less stress on your finances than stretching to make a slightly higher trust deed payment.

However if you have a strong personal preference for a trust deed it appears, from the comments, that it might be viable and a chat with a trust deed company could confirm or reject that position so that you at least know the options open to you and can make a comparison from there.

Hi, I decided to go down the route of Sequestration, I was discharged in May 2012 after 12 months. I now have a query regarding the remaining payments for the next 2 years. If I come into any money within the next 2 years can the trustees take that money? Also I have had the PPI letter from them saying that they have appointed a third party to look into whether or not I am due any refund, I know that I am not as I never took out any PPI policies on any of my loans, is this likely to delay or impact on anything. Even though I am discharged as a bankrupt I still find this all very stressful and am counting down the next 2 years until I can finally put it all behind me. One very valuble lesson has been learned here.

Hi juliet.

I'd expect that you'd keep windfalls that become due to you after your discharge (other than PPI, not that it sounds like there is any).

I don't expect that them looking into PPI will make much/any difference to you.

Out of curiosity, what was your monthly payment set at for the sequestration?