Welcome to the trust deed forum becca84.

Assuming that staying in your home is important to you it's going to be very important to ensure that an agreed plan is in place with your mortgage lender to deal with the arrears.

This type of debt is treated as a priority by debt and trust deed advisers as the consequences of non-payment can be so severe.

The thing to do will be to speak to a suitably qualified adviser to work out how best to utilise the money that you do have available to service all of your debts. The mortgage is the priority, but it should be possible to establish a plan to deal with your unsecured debts at the same time.

Do you think that there is any equity in your home currently?

I have come to an agreement with the mortgage arrears and a plan has been put into action. i don't think there is any equity in the property as the bottom flat has been for sale gor months at £10,000 less than what we paid

So the £300 that you mention is over and above catching up on your mortgage payment becca84?

If that's the case then a trust deed may suit you, though you'll want to confirm the lack of equity before making a final decision (which good trust deed firms will help you with).

A trust deed may not be the only option. If you prefer to avoid an insolvency and repay your debts in full it might be worth reading about the Debt Arrangement Scheme as well (though the repayment term would be a fair bit longer but not necessarily excessive):

http://www.trust-deed.co.uk/debtarrangementscheme.php

At some point I'd suggest speaking with someone to confirm that the £300 disposable income figure you have calculated is in accordance with the way it would normally be reviewed for debt solutions such as trust deeds or DAS.

Hi Becca84

As Trust Deed Assistant says, please get advice on all options and make sure the position re equity is clarified in full before doing anything.

If there is no equity, the Trust Deed may provide a solution to stabilise things.

Regards

Mark

yes the £300 is not including my arrangement for my mortgage. I like that after 36 months i would be debt free but i worry of the implications of a trust deed and about my home. If i were to pay off my debts in full this could take years which is why i am so confused

what would happen if there was no equity in the property also if there was

Hi becca

If there's no equity in cases we deal with then that's the end of the matter.

If there is, then normally an extension is made to the trust deed to pay this.

Mark

If there was a lot of equity we'd almost certainly be telling you that a trust deed wasn't appropriate becca84. The reason is that you have to pay over the value of the equity as well as the monthly contributions that are affordable.

For this reason, persons with significant equity often conclude that the debt arrangement scheme (which excludes equity in a home) is a better fit for their circumstances and needs.

So if there is equity in my property does this need to be paid to you and how would it be paid?

Hi Becca

Normally after the 36 month trust deed period, there would be an extension and payments after that are applied to equity.

Trust Deed valuations are normally lower than estate agent 'market valuations' but its important to clarify equity before deciding which option suits. Most decent firms will do this. Also, the arrears you mention will obviously decrease any equity.

Mark

Hi becca84.

If there was equity you would need to pay it over to your chosen trust deed firm to help repay your creditors. If it's a smaller amount people might make some extra monthly contributions after their usual three years ends to make up the sum. If it's a larger amount it can pose a problem.

The way that Mark's, Kevin's and Shona's firms (along with many others) work is to value the property at the start of the trust deed and "fix" the equity at that point. If there is no equity you will not need to worry about your property going up in value during a trust deed.

The valuation for a trust deed often comes in lower than people expect. It's based upon selling the home reasonably quickly and therefore might be lower than the valuation some estate agents might suggest if they were trying to get your business.

As mentioned before, good trust deed firms will take an indication of the market value of the home prior to you actually signing up. This would alert you to any potential issues with equity in advance and help to prevent any unwelcome surprises.

Hi Becca84

you may hae been burying your head in sand, but what a good time of year to get things sorted. Now that you have faced upto your debt, the hardest part is over. Now you need to meet with someone face to face to discuss all the options open to you. As you own a property, make sure the valuation is carried out before you sign anything, and that you have details of what is expected of you in writing:- if there is equity; if so how is it to be paid etc. If all of this is ironed out at the beginning, you will save yourself a lot of stress further down the line. A lot of the problems on the site are from people who have had nothing in writing prior to signing, or no face to face visit giving a full explanation of all options.

I have just spoke with Lorna and have been pre approved for a trust deed and am awaiting a call from someone at RSM Tenon. I cannot express how much better i feel telling someone my debts and them being able to advise me. Lorna was so helpful and friendly and not once did i feel awful about my debt. I will now hopefully be on the road to paying off my debt once and for all thankyou

That sounds positive becca84.

It's great to hear that it looks like a trust deed will work for you and also that the adviser you spoke with was helpful and understanding.