Hi josephine.

Typically it will be three years, but it can be longer by agreement between the parties to the trust deed (client, creditors and trustee).

There can be good reasons for a longer than three year trust deed term being suggested.

Often we hear longer trust deeds are proposed simply to fund higher than average fees for certain firms. One firm in particular is named here often in this respect and seems to specialise in five year trust deeds.

Because of that we advise people that are "quoted" trust deed terms longer than three years to get a second opinion before signing up.

My company says 39, 3 of which are allegedly arrangement fees. Is this legal?

Hi josephine.

I'm guessing, but are you being asked to make three payments to one company who will then pass you to a trust deed provider to whom you will make 36 payments for a "normal" trust deed.

If so, and if the first company has a consumer credit licence, it's probably legal.

That doesn't stop it being a total waste of time and money though. It could also leave you legally exposed to creditors for three months longer than necessary.

Most real trust deed firms (including those represented here by Kevin, Mark, Chris and Shona) don't charge that type of set-up fee.

You could choose to pay arrangement fees, but it's hard to know what the benefit to you might be.

I've just read back over your previous posts josephine.

I think you may have already gone ahead with a trust deed on these terms?

Hi Josephine

The standard trust deed states 36 months and that is the norm. The actual standard trust deed document states 36 months.

Mark

Thankyou. Are my company wrong in trying to claim 39 months? They told me in 2009 this was to cover "arrangement fees". However, I remember watching the news last year and a lot of companies were losing there license because of this.

Joanne.

Possibly not Joanne. A trust deed is voluntary and agreed on whatever the terms are by the parties involved.

If you, your trustee and your creditors agreed a 39 month then that is what you agreed.

We do sometimes hear that people are "quoted" terms longer than 36 months. Sometimes this is essential to make a trust deed work, sometimes it's to fund above average fees (or perhaps arrangement fees) for the trust deed firm that could be avoided by going elsewhere. That's why we advocate that people who are told that they must go into a trust deed for longer than three years seek a second opinion before signing.

If those are the terms you agreed to though, that's the agreement you are now bound by.

Asyou are already in the trust deed, then sorry but you are too late to change your mind on the terms. You will have to stick to whatever you signed up for...39 months.[:(]