Hi rooked and welcome to the forum.

Was the subject of the ?ú500 discussed with you before you signed the Trust Deed?

Some firms choose to charge ?ú500 for this process whereby your home (which has no equity currently) will not be revalued at the end of the Trust Deed to see if new equity has developed (which would have to be released for the benefit of creditors if it had). It's a perfectly fair and common charge though there are a couple of Trust Deed firms that do not charge for this process at all (including one of the firms represented on this site).

You could choose not to pay it. However you may regret this later if the home appreciates in value significantly.

With the reduction in income you may need to disucss this with your Trustee. They may be prepared to reduce the monthly payment but this could result in an extension of the duration of the Trust Deed to compensate for the payment reduction.

I'm sure some of the experts may add their thoughts on this as well when they next get chance to visit the forum.

Hi,
Thanks for your quick response.

Yes the the subject of the ?ú500 was discussed at the time of signing the trust deed. We were recommended to pay this but we were advised that it is our choice. It seemed ok to us at that time but now that we are ?ú200 worse off per month it will definetly be a struggle.

just had another thought, would it not be the case that if either of our wages increased we would require to pay more towards our td?

That would be the case rooked... a Trust Deed doesn't relieve an individual from repaying more of the debt if they find themselves in a position to do so.

In the situation where income goes down it needs to be remembered that the creditors enabled the Trust Deed to become protected on the basis of the expected cash return to them. An extension of the term would therefore allow the individual to continue to be able to manage their monthly budget without the creditors losing out.

Some discretion may be applied by Trustees, depending on a persons unique circumstances, so it could be worth talking it through with them.

I'd also suggest looking out for the thoughts of the experts on this site when they get chance to read your posts.

Hi Rooked,

Are you sure it's not ?ú500.00 between both you and your husband and not ?ú500.00 each? Everyone who has been on the site who had to pay this equity protection has said it was ?ú500.00 and that was it. I am in a trust deed and all my wife and I had to pay was the ?ú500.00 BETWEEN us over 12 months, I would check with your Trustee ?ú1000.00 seems very high.

Hi rooked

While I totally disagree with this payment 'to protect equity' there is certainly an argument for one payment of ?ú500 in your case if this was agreed at the outset. It may be 2 Trust Deeds, the payment they are attempting to obtain relates to a single asset.

Also, why within 6 months? I assume your case was referred over by a third party and you did not go direct to the Insolvency firm!

Mark
Mark

The part of this ?ú500 payment that baffles me is that the insolvency firm goes to great effort to record an accurate picture of income/expenditure and then requests an extra ?ú500 that their own analysis demonstrates is unaffordable!!

Am I missing something?

Hi TDA

You are correct. The biggest problem is that there is not a standard approach. The guidance uses too many 'may', 'could' etc.

If you followed the logic as you outline, you pay the contribution and then the Trustee asks for ?ú500. However should you have ?ú500 spare?? If you do, should you not be paying an increased contribution.

In addition and from ealrier posts, some firms will look at a reduced equity figure to take account of potential selling costs. So someone with no equity pays ?ú500, someone with ?ú2000/?ú3000 'may'/'could' pay ?ú500.

The best advice is to have this fully discussed and explained at the start before signing anything.

Mark

Hi Mark,
I totally agree with you. This is why my trustee said that it would have to be given to me by other sources ie a family member, unfortunately I paid the ?ú500.00 through total fear to be honest, of losing my property. I had to have my parents sign to say they had given me the ?ú500.00.

Sorry I didn't make it very clear, both my husband and I have seperate trust deeds therefore we are required to pay ?ú50O each to protect the equity on our home. This apparently needs to come from a 3rd party. I don't know why it needs to be paid within 6 months of signing the trust deed, I had so many questions to ask at the time but unfortunately this wasn't one of them. We were referred by a third party and didn't go direct to an insolvency firm and to be fair we have been happy with the service we have received although I do wish I'd maybe waited a month or so before signing so that I could have gathered more information...we got a leaflet through the door and I couldn't believe at the time there was a solution to our debt problems, we had never heard of a TD.

Hi rooked

?ú500 each is certainly a new slant on the equity position. I had a feeling it may have been referred by a third party.

Was a valuation carried out?

My advice is always to ask the question why is it required. Please ask the IP for the part of the legislation or guidance which states that ?ú500 should be paid and in 6 months. Also why this needs to be paid twice for a single asset.

Mark

I would be interested in the answer.

Hi Rooked/Mark
We have seperate trust deeds and have completed the first year. We dealt with a third party who arranged a drive by valuation which we paid for. As we have a secured loan we were advised we had negative equity and had nothing to worry about regarding the house. We were not asked to pay ?ú500 and this was never mentioned.
It would appear that firms have differing practices. We met with the third party and felt relieved to go ahead with signing a trust deed there and then. I feel that maybe we should have looked into it more and decided who to go with but in a way you feel pressurised and also relieved to get out of the mess you are in.
I met first and was there for nearly three hours ma head was bursting time I went home! My husband met with them a few days later and signed his. As we used a third party the first payment of ?ú430 jointly went straight to them I think as we paid immediately at our first meetings and a Standing Order was set up for the following months.

Hi Mark, yes a valuation was carried out and I will certainly put forward the questions to the IP and let you know the outcome.

Hi Car038, our house was valued at roughly the same as the amount outstanding on our mortgage. There has been no pressure to make the payment to protect any future equity but we were told that previous clients had complained as they had not been told they could protect any future equity and they hadn't been aware it would be an issue should they decide to sell in the future. All very scary! And funnily enough we made our first payment before the trust deed had become protected which I thought seemed strange but hey I suppose it just means we're one month closer to paying off all our debt!

As Mark says, there are unfortunately lots of different interpretations by different firms as to how these kinds of cases should be dealt with. It may be that the changes to the law which are imminent might be accompanied by further guidance which will remove some of these inconsistencies (fingers crossed!).

To try and shed light on a couple of the queries raised. As far as I am aware, the 6-month period which many insolvency practitioners use ties in with the shelf life of the professional valuation on a property. Also, I can understand the point that trust deed assistant and Mark make about the ?ú500 being unaffordable, but I think the point is that this is a payment sought from a third party, not from the debtor's own income.