Welcome to the trust deed forum Lhen.

Please be assured that your financial status will not affect the creditworthiness or access to services of anyone else that you live with. This is a myth thankfully. You don't need to tell your parents about the trust deed for this reason.

It could potentially cause some issues if you were to enter a joint financial arrangement with one of your parents (like a joint bank account for example) because that financial connection could be discoverable on their credit report. It still wouldn't affect their own credit rating though.

Your mortgage broker clearly doesn't know what they're talking about and I'd suggest (when the time comes in the future) that you find a different broker with a better level of basic competence. Numerous mortgage lenders (based upon current lending criteria) will become open to receiving a mortgage application from you in the years after your trust deed has been completed.

It is possible to complete your trust deed early once the total amount that you have paid covers the total debt plus interest and trustee fees.

Hello!

Thank you for your quick response and your advice!

I am very relieved by your reply but it was only when I noticed for example DirectLine stating for their Premier insurance for example that they expected occupants to be 'You or anyone you or anyone you are living with not to have ever been bankrupt or been in an IVA.'I know IVA is considered the English system of a Trust Deed and this frightened me. I am now paranoid I need to check all insurance documents for my parents to check the terms and conditions to see if there is anything like that. I didn't think me living with them could affect their insurance policies but just noticing that one by accident has scared me.

I am also concerned that if I am insured for anything does this make it void? I am insured on my dad's policy so does that impact him?

It's all these uncertainties. Thank you for saying that the mortgage advisor was wrong. I thought that when I get discharged I would be able to save for a deposit and then in the future, I would be able to apply like any other person for a mortgage. I understand they might ask if i have ever been in a Trust Deed but hopefully if it has been a few years since discharge and if I had a larger deposit they would consider me?

My TD is meant to be going under annual review but the third party have yet to get back to me and when I ask about early discharge they can't give me a figure so I can see how much I can afford each month to finish the TD early. I have never been so stressed.

Hi Lhen,

We would suggest that anyone taking out an insurance policy (or who is covered by an insurance policy) checks whether a trust deed will affect their eligibility to make a claim. Some insurers (but by no means all of them) see this as a risk factor that may affect policy eligibility.

We've seen loads of forum members here, over the many years this forum has been running, get mortgages after they've been in a trust deed. The longer ago the trust deed was finished the easier this becomes (in terms of more mortgage products being available, and better value mortgage products being available). Lots of these types of mortgages are provided by lenders you may not have heard of that have a different risk appetite to the high street banks.

I hope you'll receive more information soon. It's going to be tough to work out an exact monthly payment increase that you'll need to exit the trust deed early because interest will still add over time on the reducing total amount that you owe.

Thanks for your reply.

I am concerned as you had said earlier that no one I live with should be affected by my Trust Deed so does this mean I need to check insurance policies for my parents to make sure I don't make their insurance void or claims invalid?

I wish I had known this kind of impact could exist. It feels like punishment.

I understand but if I increase my payments eventually surely I will be able to pay off the whole amount and can pay interest depending on how much interest has been acrued up to that point in the TD?

Hi Lhen,

I'm not an insurance expert, so I can't really give you advice upon which you can rely on this subject. You should make your own checks to be certain where you stand.

Maybe you could call the relevant insurers, where your parents have a relevant policy, with a general enquiry (without providing your personal information) to see what (if any) steps you should take given the circumstances and policy wording.

My understanding is/was that policy restrictions would normally only apply to policyholders.

Having said that, the Direct Line quote that you have provided does seem to be cause for some potential concern. There again, how could your parents disclose to the insurer that you're in a trust deed if they didn't know that you were?

You are correct that if you can afford to pay enough then it's possible to bring the trust deed to an early end. It's just a pretty tough mathematical calculation for anyone to make if you're looking at monthly payments rather than one single lump sum.

Sorry I should have been clear luckily my parents don't have that insurance policy directly but it was when I read somewhere on the forum about car insurance being sometimes a struggle, I panicked and looked for any policies I could find that would look for TDs and came across the directline one.

I think you are right I might try phone round some insurance policy companies and just ask as I don't want to have to tell my parents and I thought part of getting a TD was it only affected me.

Ah yes I understand that might be difficult. I was hoping though if I paid off my debts in full along with interest and trustee fees, that means no more money can be taken from me even in the future? I feel morally better paying off all my debts too which I didn't have the option of when I entered the TD as I was in a bad situation.

Thanks for your help.

I also wanted to ask my mum is self-employed and works from home. By me living at home that shouldn't impact her business?

My Dad is also in a profession where TD's are not allowed so do I need to check that my TD doesn't affect his contract?

This has become just more anxiety.

Your trust Deed won’t affect your dads contract, don’t worry about that. It also won’t affect your mums business if you are not part of your mums employment. I am almost halfway through my trust deed and it’s the best thing I could have done, only wish I had done it a bit sooner!

Thank you for your response RC86.

That's good to hear - I have been very regretful and worried since I took out my TD. I find it hard to see myself getting through this.

If you don't mind, can I ask what makes you feel positive about it?