Welcome to the trust deed forum Sajybajy.

I think it's going to be helpful to split this down into a few different issues.

We've long advocated getting a house valued at the start of a trust deed with a fixed equity figure agreed. That's how all trust deeds are to be set up now, but previously different firms handled it in different ways. If you did not agree a fixed figure at the start then using an updated valuation now seems to be normal.

The effect of a trust deed is to write off the debts that you cannot afford to repay. This usually includes interest being stopped, but it might be added again if you're deemed to have become in a position to afford to pay it. That would be the case if you have this sum of equity in your home; it vested in your trustee when you signed the trust deed and they're obligated to use it to repay the debts, possibly interest on the debts (where applicable) and their own fees.

If you disagree with the recent valuation, believing it to be too high, you may wish to challenge it. That might mean sourcing your own valuation from a reputable surveyor, or even better agreeing with your trustee to appoint a mutually acceptable surveyor to value your home. If you're correct the sum owed for equity may reduce, perhaps substantially.

In terms of a reasonable offer, are you in a position to raise any kind of lump sum? If so, how much?

Thank you for replying so quickly!

There are loads of different issues here I am aware. When we entered into the trust deed they valued the house (at £20000 less than it is now), I asked about paying the £500 to retain this amount and was told they would contact me. This was not done. The person I spoke to at Invocas said that if I had asked for this it should have been arranged right at the beginning.

Prior to entering the trust deed I had already arranged a debt management plan with my creditors, but was told by what was clearly a sales woman that this was a much better option for me. I think this was terrible advice now!

I am not in position to offer a lump sum (currently with about £45 in the bank). I have out every penny I have had into paying the trust deed, so the house is now in a terrible state of repair and needs a lot of work done as some of the damage will cause damp and possibly structural problems. I was advised by the debt advisory people to get 3 of my own valuations, but consider that that may be the right valuation so think about negotiating. But I really don't know what to offer.

I think it's correct that the £500 payment (some firms don't charge this) would need to have been agreed and arranged at the start Sajybajy. It's very unfortunate that this did not happen as the current issue would have been avoided.

A trust deed may well have been a better option for you than your previous debt management plan, but obviously that doesn't appear to be the case given that the equity position wasn't fixed at the start and that your home may have increased in value since then.

What can you offer? That's the starting point for trying to work out what to offer. If you have no access at all to a lump sum this might have to involve extending your monthly payments for an agreed period unless you're prepared to sell the home.

Do you still have the paperwork from the start of the Trust Deed, Sajybajy? Maybe a long shot, but worth checking to see exactly what it said about equity, such as whether there was a timescale by which the £500 had to be paid? Anything like this might be useful to strengthen your hand when trying to come to an arrangement

Hi Sajybajy,

I'm sorry to hear about the problems your now experiencing with your Trust Deed and the uncertainty regarding your house.

Kevin makes a good suggestion on where to start with regards to negotiating with your Trustee. If you have paperwork from the start of your Trust Deed check this to see what it said regarding your property, the valuation and how this would be treated. The Trustee has to make a proposal to your creditors at the outset confirming what assets you have and how these will be dealt with. If you don't have any paperwork request a copy from the Trustee. You want to request a copy of the initial circular sent to your creditors.

Also, your Trustee may have asked you to sign additional supporting documentation at the outset of the Trust Deed so you want to ask for a copy of this. Each company is different in terms of what they may have you sign. Within this paperwork again it could provide you with more information regarding your house.

You also want to request a copy of the valuation which was obtained at the start of the Trust Deed and also a copy of the one that they have recently carried out. Your Trustee may have requested a ÔÇ£desktopÔÇØ or ÔÇ£drive pastÔÇØ valuation which means that the Surveyor doesn't come inside the house and can therefore only go on the market in your area and what properties have previously sold for. If as you say the property is in a pretty bad state then this could reduce the valuation.

You can arrange your own valuation of your property if you disagree with the one the Trustee has. If your own valuation demonstrates that there is no available equity then I think it would be hard for the Trustee to consider the sale of this. Also, request your mortgage company to provide you with a ÔÇ£redemption / SettlementÔÇØ figure as this will be needed to calculate the level of equity.

I'd suggest if possible you may want to arrange a meeting with your relationship manager/Trustee to discuss all of this and how you can try and find a way forward. As you have been advised though, you need to be prepared for the event that the Trustees valuation is accurate and you do unfortunately have a large amount of equity.

If you want to put a complaint about the handling of your case then you do that. Don't let them fob you off with the suggestion that it will prolong any negotiations etc.

Its unfortunate that cases like this of misinformation at the start of a trust deed are still pretty commonplace. Far too many times people are told not to worry about equity etc, get nothing in writing and then get a shock at the end of their trust deed when house equity rears its ugly head!

People, you have been warned. If you have equity in property, MAKE SURE you know how it will be dealt with and have this confirmed IN WRITING before you sign anything.

paul

The position with equity is and will continue to be the biggest issue for people.

It's unfortunate that there can be 2 identical trust deeds, one which mirrors yours and another where the equity position has been agreed and planned before anything is signed. The latter is the position with the vast majority of trust deeds.

The only option appears to be to speak with the trustee to explain the position and if possible have sight of the original valuation. Hopefully they will be able to reach a compromise.

Mark