Hi dm29,

Welcome to the trust deed forum. I'm sorry to hear that you've been feeling stressed about this. I hope that I can help by providing you with some information and am sorry if some of it isn't what you'll have been hoping to hear.

Your trust deed payment is worked out simply by deducting what are considered to be reasonable expenses from your income. The subject of "reasonable expenses" is tricky because we all live our lives in different ways and consider different things to be important. For that reason fairly standard guidelines are used by trust deed companies and creditors which most people find that they're able to manage on, albeit I certainly understand it can be quite tight.

The clothing allowance that you mention seems to be in line with the usual guidelines that are used I'm afraid. I can appreciate that this will be tight if you work in an environment where professional attire is important.

Gym membership is a tricky area as your creditors could consider it to be a luxury you could do without to help repay more of your debt. The exception might be if there were evidence that it was for medical reasons. Smoking is a similar issue, though moderate allowances for this can sometimes be made. Allowable satellite TV packages would normally be the basic ones.

It has to be said that these and other expenditue types that are mentioned are just allowances. How you choose to prioritise your spending is a matter for you. You are going to have to remember that your creditors agreed to the trust deed on the basis that you were going to pay back what you can reasonably afford; which will involve some sacrifices for you, but will also involve sacrifice on their behalf if they end up writing off a significant amount of the money that you owed to them.

If the increase is backdated would I be correct in thinking your income increased some time ago?

Thanks for your reply.

I totally understand what you're saying, but, with a 3 year old child and another on the way i really do not have a spare ?ú260 a month to pay towards my trust deed. What is the point in entering into a trust deed when I end up paying back what I owed originally but now have a threat over my home and am blacklisted? To me, there is really no benefits in entering into a trust deed at all if this is the case. Had I been given this information at the start then there is no way I would have entered into the trust deed in the first place. We feel like we have been totally mis-sold the trust deed and are not happy at all with the service they have provided us. They even sent Sherrif Officers to my door asking for Bank Statements, which we had sent to them months before.

I have a meeting with the person who is dealing with my case on Tuesday so am hoping to get this situation resolved but am very doubtful that I will.

Also, could you advise if we could end up paying back more than we originally owed?

My income has actually decreased since the start of the trust deed by around ?ú150 and my partners has went up by around ?ú300 so I really dont know where they are getting their fugures from (hence the reason I want a meeting) Even with the increase in my partners income, we struggle to make ends meet and I am really worried about where the money for things for our new baby is going to come from. And surely with the increases in food, petrol, gas and electric prices, they should be allowing us more expenditure for these types of things?

Hello dm29.

The most you could end up paying into the trust deed is the original debt total plus some interest plus the fees of your trust deed company. This would generally only happen where someone's ability to repay their debts each month improved significantly or they came into a lump-sum during the trust deed.

I suppose the main question is, at the start of the trust deed, could you afford your contractual debt repayments (without continuing to use credit)?

I agree that trust deed providers and creditors need to be sensitive to the price increases we're all currently experiencing.

Thanks,

To be quite honest with you, I find the fact that I could end up paying back more than I originally owed very disturbing.

Debt management/Trust Deed companies are constantly advertising all these great services to get people out of debt "hassell free" which clearly is not the case.

Had I been told this at the start, there is no way I would have opted to enter into the trust deed and would have approached my creditors on my own to try and sort out some sort of payment plan with them.

Raising a point I previously mentioned, what is the point in going into a trust deed if I end up paying back what I originally owed (if not more) risk loosing my home and am black listed?

I think it is only a matter of time before something comes out that a lot of people are being mis-sold trust deeds and given poor or incorrect debt advice by poorly trained and un-qualified debt advisers, who clearly don't give people the correct advice at the time when they are opting to join a trust deed.

At the start of the trust deed, i could not afford to pay my contractual debt payments, hence the reason for approaching the trust deed company.

Myself and my partner are now about ?ú150 a month better off than we were when we entered into it, but our living expenses have increased considerably and we have another baby on the way. Surely there must be some lea-way regarding our situation?

TDA, you make a point in an earlier post about my creditors having to make sacrifices by writing off a significant amount of my debt. Can I just add to this, my creditors would not have to write off so much debt if out TD didn't take such a large fee for themselves. According to my agreement I am paying back 25p to the pound, so if I end up paying back 100% of my debt, where does the other 75% go to?

The 25p in the pound is based on the expectation at the start of the trust deed dm29.
If you pay more into the trust deed than expected the creditors should receive a higher dividend.

Were the other alternatives (such as a debt management plan or DAS) explained to you from the start by the company that you spoke with?

nothing like this was ever explained to us at the start. as far as we were aware a trust deed was the only option to us.

initially we ere to pay 10p to the pound, which has now, after the review been put up to 25p.

creditors may now have a higher dividend, but this still does not answer my question...if i were to repay 100% of my debt (which looks like the case now) where does the other 75% go.

If the amount you pay into your trust deed happens to equal the amount that you owed at the start of your trust deed your Trustee will deduct their fees and outlays then distribute the remainder to your creditors.

If either you or your creditors dispute the fees you can have them externally audited dm29.

You should have received information on all of the debt solution options open to you so that you could make an informed decision about how to proceed. If this didn't happen it sounds as though you were "sold to" rather than "advised".

It is always worth bearing in mind when considering a trust deed that if your circumstances change for the better significantly then you may actually end up paying more than you originally owed. If this is a likely scenario for someone then they should think very carefully before signing up.

Unfortunately for you dm29, it sounds as though this might not have been fully explained