It may cause a problem, WBN. The trustee in a sequestration would have to try to gather in your wife's share of any equity, which could potentially mean them looking to force a sale, though this is always very much a last resort.

How are the equity payments being taken care of in your trust deed? Are you having to extend the period past the 3 year point?

Hi WBN,

As Kevin said this would cause a problem for the Sequestration and it would not be as straight forward as first thought. The Trustee would need to establish the equity and then an agreement reached to pay this over. If it's potentially £12,500 then this is a large sum to try and find especially when you are subject to your own Trust Deed. A sale of a property is always seen as a last resort but if someone isn't able to come up with the equity amount then this needs to be an option considered.

If your correct in that the property does have £25,000 of equity then to avoid any risk to the property your wife may need to consider the Debt Arrangement Scheme. Unfortunately the timescale and level of payment may not be ideal for you both but it will safe guard the house providing it's accepted by the two creditors. It could be the case that the timescale is reduced as and when your Trust Deed comes to an end and you are able to increase the payments to the DAS.

I'd be interested to hear how much equity has been included in your Trust Deed and what arrangements you have made to pay this over.

Hi Kevin, I'll need to get back to you on that one. I have 15 months remaining of my 3y in the TD. I pay £440 p/m made up of two payments one of which is the equity in the house. I'm probably not explaining this adequately! Let me check with my IP and come back to you.

Hi Kevin, my TD lasts 3 years, I have 15 months left. There was £25k in equity, I'm paying my share of the equity to the TD over the 3 years at £340 pm = 12k give or take. I'm going to try and negotiate a manageable payback to Eversheds/Max Recovery tho the letter they sent my wife was explicit and said not to get in touch. If they exercise their legal right to pursue through the courts then I'll need some advice on sequestration, DAS etc. I say 'me', I mean my wife of course. Any advice in negotiating with Eversheds/max recovery or anyone with experience of dealing with them would be welcome?

Have you looked about to see what the houses in your area are going for now?

If your wife was never in a TD before and you started 3 years ago you are working on an 3 year old evaluation, the property prices may have fallen a little since then. If this is the case then sequestration may be more appealing.

If not you may be able to go to a DAS Specialist and have them negotiate on your behalf (freeze charges interest etc).

Try to get the ball rolling sooner rather than later, I am not sure how limited your options would be if your wife had a decree issued by the court, I do now that it doesn't matter if your already sequestrated.

I must admit I am struggling to get my head around how you can have a trust deed where you are paying £100pm contribution payment and also £340pm towards equity. Is it not a third party paying the equity payments WBN?

Hi WBN,

If your able to see out your Trust Deed and keep Max Recovery at bay until this then your wife may be able to make increased payments to them, she could consider a DAS, a Trust Deed or Sequestration as you would be able to take on more responsibility for the household bills and also contribute towards her share of the equity.

Good advice David thanks. Hi Kevin, I'd need to check again on this. What is the usual arrangement in respect of equity in a TD?

Hi WBN.

You wouldn't usually be able to pay the equity yourself. The reason is that your spare income should be paid into the trust deed in full, with any extra amount (like equity) being treated separately.

Sometimes a partner or family member or friend can pay the equity while you're still making your monthly payments. Sometimes you can pay the equity yourself once your regular monthly payments have been completed.