Hi Charles07. Did you advise your Trustee when you lost your job? They should be making allowances for that and freezing your payments if necessary until you are back earning.

There is nothing to say that you cannot be a director of a Ltd Compamy whilst in a Protected Trust Deed, as long as it is not prohibited by the constitution of the company you set up (e t is not expressly forbiddedn in the articles of association you lodge with Companies House).

Thanks Kevin, no I didn't inform as I thought that it would be best to continue making the payments whilst I still could if that makes sense.

That's good news, I wouldn't imagine its prohibited

Hi Charles07 and welcome to the forum.

Sorry to hear about the loss of your job. It must have been a bit of a struggle and worry over the last couple of months.

Speak with your Trustee about your payments. It might be a better idea for your payments to be reduced or suspended for a couple of months rather than use family support and then have the issue of owing the money back to your family. Extending your Trust Deed a couple of months at the end could be a better option.

When you were made redundant did you receive any redundancy pay? If you did and depending on what you received some of this might fall under the Trust Deed.

Like Kevin has advised there shouldn’t be anything that stands in your way from setting up the Ltd company. I’ve got a lot of clients who are directors of their own companies and there isn’t any issues.

I’d reach out to your Trustee to discuss your change in circumstances, to update them on your redundancy and employment situation and to discuss your payments.

Good luck getting back on track financially. I’m sure this is just a small speed bump in the road.

Thanks very much David.

I toyed with the idea of freezing the payment, but I have an end date in sight and I want to do everything in my power to reach that date without the need to extend. I will have a conversation with them and see what they suggest.

I didn't receive any redundancy pay, I got a call 5th January on my first day back at work after the Xmas break and was given a weeks notice, very brutal way to treat someone but anyway nothing surprises me anymore

Appreciate the advice with regards the LTD company and reassuring to know there shouldn't be anything preventing it. Thanks again

Hi Charles07,

That sounds awful especially at that time of year too.

I can understand you wanting to try and keep the Trust Deed on track and work towards the end date. Keep in mind that there is flexibility if you do need to reduce payments or stop them then your Trustee should work with you.

It might also be a good idea to reach out to an accountant for some advice in relation to the limited company and the best way to structure this for tax purposes and also to draw an income.

Keep us updated and let us know how you get on with it all.

There shouldn't be any reason for your Trust Deed to be extended if a change in your circumstances means that you cannot afford to meet your monthly contributions. Being made redundant like that is obviously completely out of your control and should not be justification for a Trustee to extend the term as suggested above, even if you cannot afford to make the payments originally estimated.

Unfortunately some insolvency practitioners don't seem to abide by this guidance from the Accountant in Bankruptcy, but hopefully if you each out to your trustee you might find that they do. Fingers crossed.

Thanks for the advice guys, I am in the process of getting set up with an accountant and will also reach out to the trustee to inform him.

One more question, would there be any potential problems in opening a business bank account?

Hi Charles07.

There may be fewer business bank account options available if a director of a limited company is currently in a trust deed.

Do you definitely need to operate a limited company for the contracting work or could it be done as a sole trader?

Yeah it needs to be done as a LTD company. Am I out of options if that's the case?

No - there’s options but maybe not at the main high street banks.

I just googled “business bank account limited company IVA” and found some options. An IVA is quite similar to a trust deed and is available in the rest of the UK.

Ok great. Thank you for your help

Hi Charles07,

If it needs to be done as a limited company then best thing to do is apply for a business bank account. Sometimes when setting up a limited company online you can do this via a number of professional services firms and as a part of the set up process it will automatically open a business bank account for the limited company.

I can’t recall any directors telling me that they have run into problems opening up a bank account so I think it will be fine.

Do keep us up to date and let us know how you get on.