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Scottish Trust Deed Forum
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Topic starter
01/10/2012 11:03 pm
I am now entering the second year of my TD and after I put in my monthly spenditure sheet at the beginning of the first year I encountered some substantial added expenditure one of which was a car (essential for my new job which coincidently began at same time as TD) as I could not get a lease due to my financial circumstances. The car predictably broke down at substantial cost to mend. The second expense was the continuation of a Degree course that I was in the middle of when I entered the TD. Both of these items of expense were required firsly to get the job and secondly to keep it. I had no other source of financial help apart from family and now I owe them money that they now require. My annual review has doubled my payments into the trust deed. I have asked that I continue with the same payments as the first year to allow me to pay my family back and my trustee has declined this request. Is there anything I can do other than default on the trust payments and take it on the chin. Thank you for the time taken to answer my dilemma.
01/10/2012 11:18 pm
Welcome to Trust-Deed.co.uk Thesystem.
I think the root of the problem here is that a trustee will not usually make any allowance for the repayment of new debts incurred after the start of a trust deed. Unfortunately this applies to debts to family as well as debts to financial institutions.
I'd imagine they've excluded any new debt repayments from the calculation of your income minus your expenditure following your review.
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Topic starter
01/10/2012 11:37 pm
Thank you for the reply.
My review didn't include my debts to my family. I receive a car allowance that last year wasn't available and I can't get a leased car because of my circumstances. I think the TD is to restrictive as there is no allowance for emergencies. My contributions last year covered at least 15-20% of my total debt and I agree that my contribution's this year could be more taking into account my car allowance. My family helped me avoid not being able to make my contributions last year and now I want to pay them back as they are finding themselves financially stretched.
Can you explain in lay man terms the difference between TD and Bankruptcy please as I will not allow them to suffer on my behalf especially as I was only looking for a postponment of my significant rise in contribution.
01/10/2012 11:37 pm
Hi again Thesystem.
I should have asked... did you tell your trust deed firm at the start that you would have costs for an essential course and get their approval that they'd make allowance for this expense?
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01/10/2012 11:45 pm
I think we were writing at the same time.
Trust deeds and bankruptcy are quite similar in many ways. Each will require you to pay what is deemed by the trustee that you can reasonably afford for a period of three years (sometimes longer for a trust deed).
Neither will make allowance for debt repayments to family.
There can be a modest allowance for emergencies and also for car maintenance.
The issue for your trustee is that they became responsible for ensuring that you pay what you can afford towards the debts when you appointed them. They may feel that postponing an increase that their analysis suggests you can afford (if you aren't repaying family) would be a dereliction of their responsibilities.
Qualified Debt Adviser & Forum Administrator - Ask me anything about Trust Deeds
