Hi there, I am far from being an expert but my understanding is if the equity amount is fairly low you can get a third party to buy out the trustees interest in the equity for a small lump sum, ie the ?ú500 bond. The cash must be from a third party though, if you both enter a trust deed the payment must come from someone else.

Hello gettingitsorted and welcome to the trust deed forum.

I'm afraid that the information that you have been given would appear to be entirely incorrect.

If you decide to sign a Scottish trust deed you are committing to paying what you can afford towards the debts each month for a period (normally three years) and to pay over the value of any significant assets that you have (usually equity in your home).

If, at the start of the trust deed, a valuation reveals that there is no equity (or negative equity) in your home you may be given the opportunity to "protect the equity". Many trust deed companies charge ?ú500 for this. There are a couple of companies (including one represented on this forum) that do not charge for this at all. It basically means that your property will not be revalued later in the trust deed when equity may have developed if property prices have increased and/or a repayment mortgage has seen your mortgage balance reduce.

If there is equity in your property it will need to be dealt with as part of a trust deed. That means that the amount of the equity will have to be found somewhere or somehow before the trust deed is brought to a conclusion.

Please remember that in a trust deed the valuation used is likely to be reflective of that for a "quick sale" rather than the ambitious type of valuation that an estate agent might provide you with. You may well find that your equity is assessed much lower than you expect, but it would be sensible to investigate this before signing up to anything.

In terms of your debt levels and the amount that you can afford to pay towards the debts each month protected trust deeds do appear to be viable options. The situation regarding your home however means you should be careful about the decision that you make.

Do you think that ?ú30000 of equity in the property is realistic if the home had to be sold quickly?

Hi gettingitsorted

many thanks for your post as it highlights everything that is wrong, almost in one post.

The call is no different to your double glazing or conservatory call and for a licenced insolvency practitioner to be associated with this type of 'sister company'' is a disgrace.

In November this year, Trust Deeds had an amendment where a Trustee could exempt property. This was designed for low/no equity property and would require a lot of hoops to be jumped through to get it underway/accepted.

In your own circumstances, no IP in my opinion could reasonably put together a proposal asking creditors to exclude ?ú30k equity and ever hope it would be accepted. That said, equity is calculated by a valuation for Trust Deed purposes which will normally be less than what what is expected on the open market, less the redemption figure for the mortgage. I think this is the key issue as it may well be far less than you estimate.

The concern is that the debt levels are high and it may only be a matter of time till one of your creditors commences legal action which may put the property at risk.

Trust Deeds can provide a genuine solution in the right circumstances and even this combined with DAS or another option could be beneficial.

My advice would be to sit with a reputable Insolvency Practitioner face to face, ask loads of questions and look at ALL the options, then clarify the equity issue and only then make a decision.

Hope this helps a bit

Mark

Hi Thanks for replying and for the information. The equity of ?ú30000 is probably the figure we would be looking at if we sold with an estate agent and even then i dont know if this is a bit ambitious with the current housing market. If there is equity we dont have any family members who could help us out so how would be deal with it?

Hi Mark
thanks for replying at the moment all cards loans ect are paid up to date although it is a struggle but next month or mortgage is reverting back to a repayment( it was intr only for past year) and it will be impossible to continue as we are.Can i contact you and make an appoitment with you?

Hi gettingitsorted

of course, I'd be delighted to assist. Equity can be dealt with in various ways, remortgaging at the end or extending the Trust Deed to pick up the equity etc.

The position regarding the house has to be paramount to everything you do. If this can be dealt with in a regulated and agreed way, everything else is easy,

Mark

Hi Gettingsorted
First of all welcome to the site. Your are doing the right thing by approaching the experts on this site as they are professional at the job they do, i was in the same position last year as you.If it makes you feel better i used Mark for my TD and found him and his team very helpful.Mark will not ask you 2 sign anything straight away at the meeting, he will ask for all incomings i.e wages chid/family tax creditsand out goings i.e Mortgage,car payments C/tax and food/clothing bills(dont include your debt payments)he will work out the surplus which goes toward your TD payments.After my meeting i stopped all my payments to my creditors (credit cards & loans)any phone calls or letters you get from your creditors you just pass them on to Mark and he will deal with it.Best of luck & let us know how you get on as your are in good hands.