Hi thegwa, this is probably not what you want to hear, but I think you should seriously considering cancelling whatever arrangements you have with this company and go and look elsewhere.

Too things really worry me about your post.

1. You've already made a payment, but nothing is confirmed as yet (do you know if you've actually signed the trust deed?)

2. The position regarding your house was not crystal clear for you right at the beginning and seems to be almost an afterthought by the firm.

I'm guessing that perhaps you are dealing with a middleman of some sort who is pretending to be helping you, but actually is a marketing company who will be paid for selling your trust deed to an insolvency firm.

Are you able to give any more details?

Have you actually signed a trust deed yet? (It's a legal document and they should have made you aware what it was when you were signing it...)

Oh, and a third thing - the only way to be sure about the house is to get a survey by a surveyor. Basing value on an estimate in the area is not accurate at all! Another reason to be very wary of whatever company this is.

Hi thegwa and welcome to the forum,

When you mean you are at the point of finalising your Trust Deed do you mean you are just at the point of entering into it and taking advice? If you have actually signed the Trust Deed paperwork then you are tied to that firm.

A Trust Deed works on the basis that you make a monthly payment for a period of 48 months. If you have assets such as a property and this has some equity in it then this needs to be paid over for the benefit of the creditors.

Before entering into a Trust Deed a valuation should be obtained against your property and a settlement figure for your mortgage. If it turns out that the property has some available equity then you can either have third party pay this over or extend your Trust Deed for 1 additional year at the end of the 4 year period to either pay the sum over or a proportion of it.

As you have a mortgage which is part secured and part unsecured the unsecured part of it is included as a debt into your Trust Deed. The Trust Deed only takes into consideration the secured part of the mortgage for calculating the available equity.

Everything to do with a Trust Deed should be confirmed and set out in writing prior to you proceeding about it.

Some excellent points raised and questions asked by GayleC.

The calculation of the equity is standard in respect of the unsecured part being taken out and the equity based on the remaining secured debt - that is how it has to be done.

However, it does seem odd that a valuation may not have been done. Did you maybe request that they just do a drive-by valuation, rather than an internal inspection, so as not to worry your parents?

They don't seem to have made any allowance for the notional costs that would be involved if you were selling the property either, which is something that we would do and would reduce the equity required further.

A second opinion might well be worthwhile - though unfortunately may be too late if the Trust Deed has already been signed...

Yes i guess it is a middle man. Just not wanting to name company publicly at the moment as i tied to them for now. Have just phoned to cancel things as I am not 100% comfortable. They are going to phone me back.

Signed the trust deed part yes but it cannot be fully completed as the 3rd party party has not been signed. I was told the other day it is not too late to pull out, so hopefully it is still ok.

Hi thegwa,

Don't worry about naming the company, this isn't something that you need to do.

It sounds like you might have the option of seeking second opinion regarding your options.

As Kevin has advised speaking with someone else may mean that actually once notional selling costs are taken off of the equity sum then you might not have any equity and in turn no need for a third party payment.

We always suggest speaking with a couple of advisors before taking the decision to sign with one particular firm. Some things can vary from firm to firm.

Kevin or I would be happy to give you that second option and you can then decide where to go from there.

How much are your debts and how much have they asked you to pay per month?

To answer a previous question, no I did not ask them to do a drive by valuation. They did the valuation themselves without looking at the house internally with little room for me to question it as lead to believe that was standard.

Unsecured amounts to approx 20k. Payments are 163 per month and the 3rd party is 63, both over 4 years. At this point if I can get out of it then great, but I am wondering now if a trust deed is really the best option for me.

Hi thegwa,

I wouldn't necessarily say that the Trust Deed isn't the best option for you. If you have been told about all of your options, the pros and cons then you will be able to decide which option is best.

From what you say, between your payment and the third party payment you will repay £10,848 towards debts of £20,000. As a result if the Trust Deed is accepted then it will have saved you in the region of £9,000 which is a substantial sum of money.

Your alternative options to a Trust Deed could have been a Debt Arrangement Scheme. This is a plan whereby you pay all of your debts back and generally this will last longer than a 4 year Trust Deed. If for example you pay £226 per month then that plan with last approx. 7.3 years if you use a free sector for this. The other alternative could be Sequestration but this again works similar to a Trust Deed in relation to how the equity is dealt with.

My firm will carry out a desktop valuation of someone's property and I'm sure many others will. If after this a client feels that the valuation of their house is too high then we can organise an internal valuation. When we request a valuation we tell the surveyor how many bedrooms, bathrooms, the condition of the property etc in order to get an accurate valuation.

I think the only difference for you is that different firms handle Trust Deeds slightly differently and this could have resulted in a difference in relation to the equity amount.

Overall without knowing exactly what your circumstances are like I still think that a Trust Deed is a suitable option to help you write off a proportion of your debts and become debt free in 48 months.

You also need to feel comfortable with the organisation and case worker that you are using. Could this be what is making you nervous and putting you off rather than the Trust Deed itself?

It may well still be a good option for you, so you shouldn't rule it out just on the basis of an iffy experience with a middleman. Having said that, there may be other suitable options to consider too.

It is only you that can decide what you feel most comfortable with, but a good adviser will set out the pros and cons of each so that you can make an informed choice.