Hi,

Getting a trust deed worst mistake of my life. 

When i did get my trust deed  my Income and expenditure did not add, was also using credit card. I was granted a trust deed.  The companies only care about there fees they will receive.

With regard to your salary is that likely to go up? More your salary goes up the more they expect you to pay after you get a trust deed. The robberies never told me that only found out a year after I got a pay raise. But jump in my monthly payments was big.

Is your job something that AI could eventually do that could make you loss your job?

Also Remember bonus or any additional income goes straight to trust deed 

Do you have a mortgage, if so they want a stake of that also, Potential to loss your home and all the equity in it will go to the trustee. You get none thing.

Aftercare is shocking, they dont care you have at that point signed a legal contract your stuck.

Most of your monthly payments wont go to creditors, the trust will take most if it. Creditors total my get £5-7k if lucky.  

Watch out of the bait and switch technique they will use to push you to a trust deed. 

Looking back in time I would have definite talk to my creditors work out a solution. 

REMEBER YOUR DISPOSABLE INCOME WILL ALL NEED TO GO TO THE TRUST DEED FOR YOUR MONTHLY PAYMENT. SO EXPECT NO HOLIDAYS NO EXPENSIVE ANYTHING. YOU NEED TO LIVE LIKE A MONK. 

CAN YOU DO THAT?

YOUR LIKELY TRUST DEED WILL BE 6 YEARS. SOLD ME THE 4 YEARS. AFTERWARDS FOUND OUT TO WAS 4 YEARS. 

IF YOU HAVE A PARTNER THEY MIGHT ASK THERE DETAILS ALSO. 

Posted by: @twotone90

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Hi Everyone

Been lurking on this forum for a couple of weeks.

Like everyone that has ended up on a Trust Deed, I have a debt problem.

I have had initial discussions with a debt advisor but I want to see some other viewpoints. 

My figures are likely higher than most trust deeds. Significantly I imagine.

My total debt level is around the £60,000 mark. I am on a salary of around £41,000.

With my income and outgoings I do not believe that I will be able to repay all my debts in a reasonable time. I.E if I applied for a DAS it would take me the maximum allowed 10 years at a significantly high figure. Which leads me to the TD option. 

How likely am I to be accepted with these types of figures? A ballpark figure that I could afford to pay would probably sit around the £400pm mark so would lead to significant write off. I have a high amount of creditors (all unsecured loans, credit cards, catalogues and BNPL, usual suspects).

At this point I still have a perfect payment history. Problem being I use credit to pay credit all the time and my credit cards at this point will show some luxury spend (just then timing of it). 

My credit cards aren't miles off their limits now and I need help with my debt problem. Its just got away from me the last year or two.

Is it a good idea at this point to contact all creditors myself and offer token repayments for a few.months. If I do this I will also apply for a Moratorium. 

 

What I am concerned about is being rejected because my I and E doesn't add up (I have been robbing peter to pay paul for ages and my bank statements are chaos. Or being rejected because I have recent spend which would be deemed as luxury. 

If I clip all my debt myself now and wait a few months before looking at a TD would that leave me in a stronger position as my bank statements would look cleaner and show a more realistic viewpoint of my day to day ins and outs.

One thing is for sure is that this can no longer go on. Any advice is greatly appreciated.

Hi Twotone,

Welcome to the forum.

I have recently just been discharged after being in my TD for 5 years.  I had a similar amount of debt (think it was £58k) and I was earning about £32,500 per year.  I had also made a couple of largeish purchases towards a few months before I faced reality and gave up.  I don't think you have anything to worry about in that respect in terms of getting it granted.  One of the Trustees might disagree but just sharing my own experience for what it's worth. I don't think that level of debt will be particularly unusual.

As NewGuy has said, there are things to be aware of such as you having any significant assets such as equity in your property or a car.  I had to extend my TD by a year to pay off what equity was deemed in the property.  He also has a point if you know there is a big promotion or other boost to your income ahead. From your post, I'm guessing that's not the case though.

I wouldn't recommend delaying if it's what you decide to do. I stuck my head in the sand for well over a year and just wish I had gone into earlier, simply because I would have been out of it earlier.

Only other thing I would say before you go into a TD is to have a look at how long you have left on your unsecured loans. Unlike the credit cards they at least go down with every payment. If there isn't long left on them, is it worth trying to struggle on a bit longer as it would free up funds to give you breathing space or free up funds to make a dent in the cards?

Maybe worth looking at before you take the plunge. Don't get me wrong, I know how that level of debt feels but maybe worth taking a step back before you commit. A TD is there as a solution at least but it might still be possible to avoid it. 

Best of luck.

Hi Twotone90,

I had a similar amount of debt and slightly lower salary than you.

As an ex-partner had been in a trust deed years ago and said he really struggled to buy anything for himself as the trust deed took almost every penny he had, I took some time to consider a trust deed vs a debt arrangement scheme for myself.

I decided on a debt arrangement scheme which has now been running for 3 years and I pay £504 per month and the term is just over 9 years. It's a long time and I keep wishing it was over!

My reasons for selecting a DAS is that I was worried if I opted for a TD then they'd force me to sell my home and I have around £45k equity which I'd need to pay towards my debt and then I'd be homeless. I'm not sure that would be the case but I didn't want to chance it!

I'm also in my early 50s so hoping I can cash in a pension pot towards the last couple of years and pay off the rest of my debt.

One positive for me which I only discovered on this forum (I think Kevin mentioned this) is that I don't need to increase the monthly repayment from £504 unless I want to. My salary has also increased by a few thousand over the last couple of years so although i'd love to have the extra £504 in my bank, I can still afford to buy presents for people and go for meals and the odd holiday.

My credit file shows that I've missed payments now for 3 years and that's something I'll have to live with, but whatever decision I made, whether TD or DAS, my credit's going to be poor unfortunately.

My ex said after his TD he built up his credit rating again quite quickly by using a credit builder credit card etc and he's now careful not to get into debt.

I thought I'd share my story and we all know how you're feeling because we've been there. 

I'd say consider your options carefully and speak to the experts before jumping in.

We all get to that stage where our debt is overwhelming, but we're managing to meet the mimimum payments by robbing Peter to pay Paul and we're embarrassed etc, but take a bit of time to work out what's right for you.

A TD would certainly be a shorter term than a DAS for you I'd think.

Best of luck

Thank you for the replies everyone. 

I am in 2 minds over the TD and a DAS at the moment. I am currently on holiday so I can't do anything until next week anyway.

The intrusiveness of a trust deed is a concern for me. I know they will audit my bank statements carefully and regularly.

I do not own a home at present however I will inherit one if my mother who is in poor health passes (morbid and there's a decent chance she won't for a good while yet but I still need to consider it).

I'm in the civil service so I do get salary increases. Promotion is possible but not a guarantee or imminent. I know I'd need to give them all extra money from this.

So aye...leaning towards DAS for now and getting on with my life. Just means il be paying it a long Time.

Is the level.of intrusiveness a lot less on a DAS? That's the main thing that troubles me with Trust Deeds.

Apart from the odd review do they just let you get on with your life as long as you are paying it? As above and elsewhere a trust deed theyve got you by the bits for the 4-5 years.

@twotone90 yes I'm just left to get on with it as long as I pay my monthly payment.

My ex said this forum was very helpful, so I made sure to join and read up on what people were posting (as you are) before phoning a debt help company.

I went with Trust Deed Scotland as they seem to have a  good reputation and are very helpful.

I arranged a call with them, went through my debts and income and expenditure and at the end of the conversation they advised i was suitable for a TD or DAS.

The overall decision was left up to me and I had to give an explanation as to why I went for a DAS.

I don't have an annual review, in fact I haven't heard from TD Scotland after my DAS was set up.

I do get default notices from most of my creditors every 6 months and they tell you that's standard practice.

I got an email from one of the credit agencies at the weekend saying my level of debt had decreased and my credit score gained a few points. I didn't expect that. 

My credit rating is sitting at "fair" now but it was poor for the first couple of years and I expected it to remain poor until the end of the term.

I have a credit card with a £500 limit for emergencies but I try not to use it.

I hope this is useful.

Thanks

Marie

@twotone90 Hi Twotone90, reviews are conducted at 12 monthly intervals and they tend not to be particularly intrusive. The reviews can result in your payment going down (for example if you're bills have increased by more than your income), or up (if your disposable income has increased). The allowances within the Common Financial Tool are fairly generous, so I do not agree with NewGuy's comment that you would need to "live like a monk".

The easiest way to think of this: A Trust Deed is like a contract between you and your creditors, where you agree to pay what you can afford to pay each month for a period of four years and, if you come into assets you will release the value of these for creditors.

Creditors agree to surrender their right to recover the debt from you and to apply interest, and will meet the costs of the process (unless you have such a positive change in circumstances that you can repay in full). They will write off as much debt as is required at the end, provided you have complied with your obligations.

There are benefits and there are disadvantages to all solutions, the important thing is that you are confident with the advice that you have received and feel empowered to make an informed decision. Whichever solution you feel meets your needs most closely, opt for that one.

If you do not feel like your advisor has provided you with sufficient information to make a fully informed, confident decision, I would recommend seeking further advice from an alternative provider, who may take more time and attention when providing it.

One further point to note, from Marie's comments:

Where a Trust Deed is granted, there is a legal obligation to default accounts as at the date of granting. This starts the six year countdown for those accounts to leave your credit file, meaning the Trust Deed and the old accounts should all leave around the same time.

With DAS, there is no requirement to default the account. Some creditors may do so, however others may list them as in a special arrangement. This may leave a trail on your credit file for a period of up to six years after the end of the DAS (though this will become less significant as time passes).