Hi goneunder,

The equity should be established at the start of a Trust Deed and an agreement made and fixed. If this is what happened then your Trustee needs to try and stick to this as much as possible. It isn't fair to do another valuation later on and find that it has dropped but not do the same with the mortgage.

If a client is able to stick to the original agreement and pay over what they agreed then there shouldn't be any problems or any extension or any need to revalue the property or look at an up to date mortgage balance.

I think in your situation it was agreed that you would re-mortgage at the conclusion of your Trust Deed to pay over the equity in your property but this wasn't possible due to the change in the financial/mortgage market after you had entered your Trust Deed. Unfortunately if it was proposed to creditors that you were going to pay over £25,000 of equity for example at the end of your Trust Deed and if you can't do that via a re-mortgage and at present your property still has £25,000 of equity then your property may need to be sold to pay this to your unsecured creditors.

Can you remember at the start of your Trust Deed what your options were at that point in terms of trying to protect your home and pay some of your unsecured debts back? If you hadn't of entered the Trust Deed what could you have done to try and deal with your debts?

Bluethunder on the forum has recently posted about their situation and how they had to consider the sale of their property following unfortunate circumstances. This is never an easy thing to try and deal with but you may be able to relate to their situation.

Yes goneunder thats what I feared could happen. I personally wouldn't be happy with your arrangements as it sounds as though you are actually paying twice each month.

thanks david and steve
my valuation was done at the start and the mortgage value considered to work out the equity. Before entering the trust deed i was advised in no uncertain terms by the trustee that i would 100% be able to remortgage to raise the equity. The experts guided me here and this is written as my chosen option into the trust deed. I followed their expert advice. Banks crashed and hundreds of millions of pounds of debt were written off for banks but I am being held by the term in place before the crash.
Steve has a valid point . the value of my property has decreased whilst i have paid . Surely three years ago my mortgage would have been 10.000 greater and my equity a lot less. But my trustee was happy to let me keep paying towards my mortgage and pay him so in effect I have been paying twice to the trustee and the mortgage but my final payment has not reduced. That is totally unjust . i still owe them what i owed them three and a half years ago yet I have contributed 20,000 to the pot.
How on earth is that fair ????
My trustee has created a blackhole for me .I followed all their advice. Payday lenders can no longer expect people to pay 100 % more than they borrowed. Yet three and a half years down the line i am being held in exactly the same position despite paying to both all this time.
It is criminal !

Steve
yes i have paid . monthly to each. but it hasn't made an ioata of a difference to my equity payment

its a total disgrace

Hi goneunder.

I guess one alternative option to allowing an extension to the trust deed for payments towards equity would have been to refuse any extension. I presume that would have resulted in the loss of your home at the time as otherwise you wouldn't have chosen the extension.

So how much do you think the equity was then (when your normal monthly payments ended)?

Would you have been in a position to pay that amount now to avoid the loss of your home?

Have you paid that amount during the period of the extension?

I guess what I'm really wondering is whether the measuring method you're unhappy with has resulted in a different outcome for you in the end?

In hindsight it would seem that changing to an interest only mortgage before entering a trust deed would have been the best option for everyone. I don't think thats possible these days though.

I think I would be contacting them to get some confirmation that no more valuations will be taking place otherwise the endless cycle seems possible to me? Good luck with it anyway

Hi TDA
Three years ago I wasn't in a position to pay the required equity . At the start i followed the advice . Listen to the experts who told me I would keep my home because remortgage was not an issue . I did exactly what I was advised. And I trusted. They also had no crystal ball . I accept that . But I did exactly what was asked of me. The banks changed .
It's in black and white in the trust deed that I would remortgage to release the equity .
If 6 or 3 years ago I was forced to sell yes I would have lost my home . I would have moved on without the need to contribute monthly to a trust deed and make payments to a mortgage . Yes I would have rented. But 3 years down the line I have paid with their agreement . But what have I reduced ! Nothing. I owe the same amount despite paying a mortgage and a trust deed. If my house had been sold three years ago I would have all the money I paid in trust deed contributions and I guess I could have possibly had a new mortgage running.
That is unjust . Three years of payments and not a penny has come off the bill. How can that be right?
If the mortgage was at fixed at the value three years ago and a valuation done then I would have owed then a fraction of what they now want .
I know that the definition of equity is also in black and white but it's only by challenging injustice that we change what is written to make a fairer future for others .

Thanks goneunder.

That fraction of the current amount, is it a sum you'd be able to pay now rather than sell your home?

Yes I have already paid off what the difference would have been . But they want more because the mortgage is less.

Is it that they want more goneunder, or is it that they now require the sale of the home to bring the equity situation to a close which will happen to generate more because your mortgage has decreased.

Hi TDA
I initiated bringing it to a close . I knew the value had decreased so they would never raise the initial valuation from the sale . But because I paid the mortgage came down so with the recent valuation and redemption figure on the mortgage the equity is the same as at the start so they want the equity . But I have created this equity because I paid the mortgage . It was not because house prices have risen .
I signed my trust deed in August 2008 , when house prices were at their highest . We all know the crash was days later . The prices have never recovered in my area . My equity was calculated when things were out of control !
Ps we both should be asleep . Thanks again TDA

I've got used to a lack of sleep recently goneunder! Thank you for your consideration though.

I think the issue for your trustee here is that your proposals, the basis upon which your creditors agreed to your proposals, was based upon a fixed sum of money at the start. This fixed sum was the equity at the time.

So the banking crash, the fluctuations in property prices, the fact that you happened to be in a repayment mortgage, all of these factors became out of your control.

However, equally, they were out of the control of your trustee also.

They're still left with an obligation to ensure that the original terms you proposed, and that your creditors accepted, are met. If the equity that's in your home now can facilitate that they may have very little option other than to go down the route you're reporting.

It's an awful situation, I've so much sympathy for how you must be feeling, but I'm not sure that the sense of injustice you naturally feel at the moment really belongs at the door of your trustee. I think it's a calamitous course of events that has left them in a very difficult and unpleasant situation, and you of course in one that's much worse.

Thanks again , you really do a sterling job and I have felt supported here.
My overwhelming feeling of injustice is that the advice given was misleading . Yes the trustee didn't know how things would change but I took their word .

I am still battling this and have many moments like trebors wife .
However I do really appreciate the support from all .

You're very welcome goneunder. I hope that we can carry on offering some support to you.

Of course, that's so substitute for medical and/or face to face support from people who will support you if you're feeling really low. Please reach out in these directions quickly if you start to feel that way.

It's a horrible situation. I do think however that when financial regulators, governments and the banks themselves didn't see these things coming, a humble insolvency practitioner really didn't stand a chance.

Sorry banking crash or not, no one should be paying a trust deed for what's going to be over 6 years now, defeats the whole purpose of a trust deed in the first place.
My eyes have been opened in the short time I've been on this forum, very glad I found it.