Welcome to the trust deed forum Hunt8.

One of the things we encourage people to do, before they sign a trust deed, is to come to an agreement with their Trustee as to what will happen with additional earnings such as a bonus, commission, or overtime. We also suggest people get this confirmed in writing before signing a trust deed.

Often, when that is done, the trust deed firm will agree a split of such earnings so that creditors will benefit, but so that the person signing the trust deed has an incentive to earn extra money as well. Everyone wins.

If you haven't got such a prior agreement you'll want to ask your trust deed company about this as soon as possible. As you have already signed up, it will really come down to their policy on the subject over which they have some discretion. They may allow you to keep a proportion of the extra earnings, however they are also within their rights to ask that the full amount be paid over to help repay your creditors.

I doubt that you'll get into any trouble about the extra you have earned, but you may be asked to pay it over (or some of it over) to help repay the debts.

I don't think you can expect to see the trust deed reduced in duration. If things get better it's expected that more is paid over; the premise behind a trust deed is that it only writes off what you cannot afford to repay.

There is an exception to this though. If you repay the debts in full, interest on the debts, and the fees/costs of your Trustee, the trust deed will be brought to an end. Depending upon what happens from this point forwards I suppose this may become relevant for you, not least because five years is a very long time for a trust deed to run for.

On that subject do you know what the fees for your trust deed are? It will be on the documentation you got at the start. From the information you have provided I'm guessing they are going to be pretty high which might partly explain why a five year trust deed is in place in the first place.

From what I can make out, it looks like the fees total £7767 inc. VAT.

If I've worked it out correctly my total original debt including interest and fees is £37 153.

Divided by the 52 months remaining would be £714 a month which I think I could afford. However, I know it doesn't work like that.

When I speak to my Trustee on Monday do I simply ask for a review? Or at least a form to fill out my income and expenditure again?

Also, as there is still a long term left on my PTD and I fully expect to get pay rises from my work during that time, is there a way of checking with them how much I've paid / still to pay? Like some sort of statement? As it's clear that I will be able to repay my debt in full I would like to get it done as soon as I can and see the target of finishing getting closer.

I must say the fees appear to be extremely high. I have trading trust deeds were the fees were no where near that amount.

I'm surprised they got it through to be honest as it doesn't leave hellish much for the creditors.

I think your only option is to contact your trustee and see what they say.

Mark

Its a shame that people are being thrown into trust deeds which are far longer than they need to be,simply to allow a greater fee for the trustee/TD firm.

Does the CAB ever direct people to this website as its without doubt one of the best places to go for advice??

Paul

I was intitially disappointed when they told me it would be over 5 years. But I had no knowledge of TDs or that different companies may do things differently.

As is the case for most, I was managing my debts when a change in circumstances brought them to a head in the space of 2 months. I panicked and was then releived when the TD was accepted and protected. I hadn't really thought much about it since, and just thought it would trundle along for the five years and I wouldn't be able to get credit. It wasn't until I found this forum that I realised exactly what a TD was and I was in effect paying far less than I should've been. This then brought more panic as I worried about what punishment I may receive for "cheating".

I've calmed down now (although I've still to speak to my Trustee and find out exactly what they'll say) and I feel fortunate that I'm likely to be in a position to pay off my debts in full.

I realise the fees are high, but in the long run it will work out cheaper than if I never signed up to a TD. Even with my improved circumstance I wouldn't have the discipline to pay off my debts in 5 years, as although I say I was managing them, I was only paying the minimum payment, and I'm sure I would have contimued to do that.

I think that's a great way to look at it Hunt8. It does certainly seem that the trust deed has given you a chance to clear the debts within a timeframe that is reasonable to you.

It is a bit of a shame that it will run for five years. There are some circumstances where the additional term is necessary to make a trust deed acceptable to creditors, especially where the monthly contribution is fairly low compared to the overall level of debt.

Sadly it seems that much of your extra term is there to fund well above average fee levels for managing the trust deed, and that another firm could probably have handled it over a reduced term. We generally suggest that anyone told that their trust deed will last for more than three years seeks out another opinion from another trust deed firm before they sign up.

However, the most important thing is that the trust deed itself is achieving what you need it to do for you. Good luck with the conversation about the additional bonus income you have received.

Spoke to KPMG this morning.

They do annual reviews rather than 6 month and so my first was due in March as that was when I signed the trust deed. I requested that it be done now so they are sending out the appropriate income / expenditure paper work and request for payslips etc.

Regarding my bonus pay, they have said that they will take 50%. How do I work out how much this is?

In explanation; my pay slip lists my basic pay plus my bonus before tax. Then my Tax, NI and Student Loan deductions and I then have 1 figure for my take home pay. As my pay fluctuates quite dramatically month to month how do I know how much "take home" bonus I'm actually getting?

Hi Hunt8.

I think they'll probably look at the difference between what you expected your net income (after deductions) to be at the start of the trust deed, and what you have actually received after deductions.

I'm really pleased to hear that you can keep 50% of bonus income. So long as the bonus payments keep coming from time to time this will make getting through the trust deed to the end much easier.