Hi RMMT1 and welcome to the forum.

There's nothing stopping you from becoming self-employed or working for a new limited company operated by your partner.

Like any change of circumstances you should keep your trustee updated, and especially so if it results in a change in your income.

If your income increases it could result in an increase in your trust deed payment. If your income decreases significantly there might be consequences for the viability of your trust deed, especially so early in the arrangement.

I would encourage you to discuss your potential plans, and any possible consequences, directly with your trustee.

Hi TDA, thank you for your quick response.

Could my TD potentially fail if I couldn't prove I was earning enough in September and beyond?

And, I have a question that is a sort of hypothetical situation for the future (I have read other topics on here so I think I know the rough answer already). If I were in a position in the future to pay off the TD (in full or paid more to pay back sooner), I know TD have their own fees + whatever £ is remaining + (I assume) interest too.

1) Is it possible to pay it off before the 4 years? Especially if I earned more and paid a bigger monthly amount which could clear it before 4 years is up.

2) How is the interest over time calculated and can I ask my TD at any time for a settlement figure to pay it off?

Thanks for your assistance so far.

Hi RMMT1,

There is a risk of failure if you're unable to afford to make your payments, or if the payment you can afford to make is much less than what was originally agreed with your creditors.

The only way your trust deed can be completed before 4 years is if you pay the full debt you owed at the start of the trust deed, plus interest costs (which will increase over time) plus your trustee's fees and costs.

This total sum could be funded by monthly payments, lump sum payments, or a mixture of both.

If you believe you're in a position to end the trust deed early you can ask your trustee to confirm the amount required at that time. This figure will change over the course of time based upon your monthly payments, added interest, and incurred trustee fees.

I think at the moment though it would be best to focus on making sure you can navigate through the next few months and recommend you contact your trustee to discuss this subject.

I will contact my trustee.

Thanks!

Hi RMMT1,

As a quick addition to what TDA has mentioned - you should definitely discuss your plans for self employment with your Trustee, as they could object to this. Theoretically a Trustee is in a precarious position if you're self employed and subsequently incur trading losses.

There is certainly nothing to stop you being employed by a new Ltd company (you could even set up your own Ltd company but need to make sure you adjust the model articles of association appropriately).

Technically a Trustee should not terminate (fail) your Trust Deed if you have a negative change in circumstances beyond your control, however as this is set out in guidance as a "should not" and not a "must not" some Trustees will fail and others will not. This early in a Trust Deed however is a bit different. For example, if your debts are less than £25k, you have no assets and are unemployed - expecting that to be for the foreseeable - they may view it in your best interest to terminate and allow you to apply for MAP

Hello,

I thought I would add on to my previous thread instead of creating a new one. 

I'm due my 2nd annual review in April/May time, as we all know the cost of living crisis, payments keep going up and up. I was managing it all fine until our Gas & Electricity TREBLED this month and this is with the £67 government payment subsidising it. 

Now, I'm a little panicked. My rent has gone up since last review, monthly cost of fuel has increased plus G&E above - £100 I pay I'm now cutting corners on other things to make sure I have it at the end of the month. 

I've sent my TD an email. However, I seem to have this memory that £100 is minimum? So whilst I await a reply, can anyone answer - is £100 the minimum amount? Can/will they help me? 

Thanks in advanced for your replies.

Hi RMMT.  I'm glad to hear that your Trust deed is sill running successfully despite the early setback.

Your question is obviously one that very many people are grappling lately.  Firstly, there is no minimum amount that is required.  At the point when you sign the Trust Deed, if your proposed repayments are low then creditors may reject the proposals, which is probably where you have got this minimum figure from.  However, once the Trust Deed is in place and protected then it is up to your Trustee to ascertain how much you can afford to pay and collect this from you.  This figure can go up or down depending on circumstances.

if you can no longer afford to make the agreed payments then you should contact your trustee with evidence of the increases to your outgoings and ask then to reassess how much you have to pay.  They may agree o reduce it, though may also expect you to continue to cut some corners here and there as a compromise so that some kind of payment is sill available.

Thanks for your reply. Still awaiting TD getting back to me. I appreciate your help! 

@kevin-mapstone Do you have any advice on attempting to be approved for a mortgage, with 1 (being) in a TD. My partner earns a lot more money than me and I'm wondering is it viable? Or is it simply unlikely I'd be approved? 

@rmmt1 Apparently it is theoretically possible to get a mortgage in a TD but almost certainly not worthwhile doing. I am stick on a high variable rate and started looking into it a few months ago at the height of the scare around interest rates rocketing.  I read one interview with a broker who said that the only people getting offered horrific rates were folk with serious debt problems, such as ours. The rates getting offered were like double digit so not exactly worth pursuing.

It is certainly difficult to get a mortgage when in a Trust Deed.  The other issue is that you normally need to be able to put down a decent deposit too, which I presume may be difficult for you given the Trust Deed.

Your partner may be better off applying in their sole name, though the lending decision would then be based purely on their sole income so I suppose this may cause a problem too.

Hi all, 

Me again with another question and situation. 

I completed my 3rd year review. My Trust Deed is due to end June 2025 (8 payments of £100 remaining). The final email I got with the 3rd year review was:

"As discussed during our call today, your income and expenditure is showing that you can’t afford to make your monthly payments towards your IVA. However, you explained to me that you feel you can continue with your contributions of £x100.

If at any point you are struggling with your payments, I would like to remind you that we can look at reducing them, or ending them completely. There are also other debt solutions that might be more suitable for you, for example a Debt Relief Order, or Bankruptcy.

As requested, I will not make any changes to your current payments at this time, but if you would like any more information about these options, please contact us."

I'm not sure if I was right/wrong to say I can pay the £100 or not, as if I can't my boyfriend sends me the money if I'm short at the end of the month. I guess I sort of panicked as I didn't want it to potentially fail after 3 years so I've agreed to £100 per month. 

Now, a little backstory and update, I am 25 weeks pregnant and I am due to go on maternity leave as early as first week of December, I contacted Trust Deed advisor who completed my 3rd year review and he's replied:

"As per below email, I would request to provide the evidence of the maternity pay, paperwork MACB1 by early December.

 Also, as from December , please provide 3 months of bank statements." then said "Now, if you will take payment break for maternity or close your file, we need to do a review first to re-assess your affordability."

I can send him my MATB1 and 3 months bank statements but I am still concerned I've got this far and it might fail with only 8 months to go. I don't want to take a payment break as I want it ended sooner than later and I don't want to prolong it unnecessarily, I don't another debt solution or a Debt Relief Order that stays on my credit file for another 6 years. And I definitely don't want to file for bankruptcy over £800.

I know it's only £800, I guess I'm trying to work out if it's worth trying to get the payment reduced or "end it completely" like the advisor said. What can he offer? 

My circumstances now, I'm now sole employee that my partner is director of and due to struggles, we've cut my salary to part-time. I know the numbers will literally show I can't afford it (as the advisor said, my full-time salary showed I couldn't afford it with my half of our private rental). 

Should I just deal with the last 8 payments? As my partner thinks theres no point in stressing and sending info over for them to possibly force me down another route when I'm so close to the end. If anyone knows what the might offer or end it completely, I'm so open to hear your advice. 

Thank you for reading and all feedback is welcome! 

Hi RMMT1,

You're right to be cautious of the impact of the decision you make. From the sound of it, you're still absent some information from your TD adviser. If you are seeking to reduce your remaining payments, they should be clear with you about the process, what this does to your term, what impact this will have on your TD and whether you can satisfy the terms of your trust deed under any of this.

If you can get this information, come back and see if anyone can help. Without this, if it was me, I'd make the last 8 payments and be done with it. 

Good luck with whatever you decide. And well done for getting to this point. Also, congratulations on the pregnancy!

Hi Paul,

Thanks for the reply and the well wishes - much appreciated! 

Thats the way I'm swaying now, just to pay last 8 and be done with it. As I don't feel like I'm getting all the info to make the best informed decision, I feel they are holding back and that makes me nervous they'll try push me in a direction I don't want to go in. 

Thanks for the reply again!