Hi Snooze, welcome to the forum.

I can assure you you're among friends here, with many other people who have been in the same position as you that understand exactly how you are feeling, and of course the experts are here to answer any questions you might have. So hopefully together we can help take some of those nerves away.

I guess the first question to ask is have you had advice about all of your options yet? Also, why do you say 5 years? A Trust Deed usually runs for 4 (though it can be longer if necessary).

Hi Kevin thanks for the reply, 1 company told me 4 years but and another told me 5 years, I am waiting on a drive by valuation being carried out but don't think I have any equity in my home anyway. It's a lot to try and understand

Welcome to the forum Snooze.

A 5 year trust deed is something you'll want to avoid if you can.

How much do you owe?

How much is it being suggested you pay into a trust deed each month?

Hi Snooze

Can you provide a rough estimate of total debt and estimated income contribution. This will hopefully at least give some guidance on figures. As TDA says, it's unusual for the trust deed to be extended over the longer period ad should be avoided if necessary.

Mark

Hi Snooze,

Welcome to the forum and well done for taking steps to try and deal with your financial difficulties. As Kevin said you will receive a lot of support on the forum from the experts and also people who like you are just starting out on the road to being debt free but also the ones who have successfully completed their plans.

As others have said normally Trust Deed's would last for a 4 year period. They can be extended to 5 years if you have any assets i.e. a property or expensive vehicle and you are going to pay over the equity in them. Sometimes though a Trust Deed can run for 5 years due to the fees that the firm charge so you also need to me mindful of this.

We always tell people that it's best to sit down face to face with a couple of different advisors from different firms to see exactly what options you have available. These options could be a Trust Deed, Debt Arrangement Scheme, Sequestration or another alternative. By doing this you will be in a good position to decide which option is best for you.

Also, if it's a Trust Deed that you do proceed with you want to ensure that you receive in writing at the outset exactly how things will work with regards to your property, how much you will pay per month and how long your Trust Deed will last for.

Try not to feel too overwhelmed by it all. If you take your time and speak with a good knowledgeable advisor they should be able to put your mind at ease regarding a lot of things.

Is there anything in particular that you are feeling overwhelmed about?

Thanks everyone, the breakdown is
Myself £13,000
My husband £ 3,500
& joint £ 33,000
Disposable income approx £300 / £400
Mortgage £69,000 value £75,000

Hi Snooze, Welcome to the forum, and good luck with your Trust Deed. I'm a year into mine, and it hasn't been easy, but it has been worth it - the calls and threatening letters from creditors took about a month to drop off after I signed, but it's such a relief.

for your valuation, think about how your home compares to others around you - I live in a flat where there are 2 layouts in the block, and the original drive by valuation for mine (smaller size) was based on the prices for recently sold (larger size), plus mine is in a fairly poor state internally. I told my Trustee about this, and got an internal inspection done (Trustee paid, so it gets added to the fees, I didn't have to pay up front!). The original drive by value was 115-125k, but my internal inspection was 95, which reduced my equity available quite a bit. I'm paying my equity off at the end of 3 years (signed before the changes in Nov 13) so 22 extra months to cover it - losing the flat was my biggest worry. If you think the valuation is right, thats great, but if not, do ask about getting an internal inspection, it could make quite a difference.

Also, make sure that if there is any equity, you get an agreement up front about how much, and how it's to be dealt with. Mine is fixed as at the point of signing, and can't be changed if the prices go up round here. I've seen a few stories here about people who had to get homes revalued at the end of the Trust, and then had to worry about paying off more than they expected, or finding lump sums, and hopefully you can avoid that by sorting it out at the beginning.

If you get overtime or bonuses at work, ask how they will be dealt with too - my overtime is intermittant, tends to be a lot one month for one off projects, then nothing for months. My Trustee arranged for my agreement to be that I would pay 50% of any OT/bonus to my Deed, and keep 50% (she said there was no incentive for me to do any OT and pay more to my creditors, if I didn't get to keep any of it!) so you might be able to do something similar. It's worth asking, and means if you did get extra, you know what happens to it.

The experts will be able to tell you if you're allowed to have something in your budget for unplanned expenses, saving for birthdays, Xmas etc. I didn't ask about this, then had a few huge unexpected bills, so I wish I had!

The biggest thing I think can help is keeping in touch with your Trustee or relationship manager, specially if you have any change in circumstances. Your budget should let you live a reasonable life, although not a very extravagent one and everything Ive seen on the forum says your trustee should consider adjusting your payment if things change, so let them knowi if anything happens.

Good luck!

Hi Snooze,

Thanks for the breakdown.

With regards to the equity, have you had a formal valuation carried out and obtained a redemption figure for your mortgage to accurately calculate the level of equity?

Thank you so much jjdecay it's good to hear from somebody who is going through the same process and I will double check everything you have said, like that both myself & husband do sometimes get overtime which I thought would go straight to the TD, thanks again

Hi David yes that's the redemption for mortgage & secured loan, & I doubt the valuation would be different going by the properties in the area at the moment ,

There wouldn't be much point in doing overtime if you just had to pay it all into your trust deed, so most firms will allow you to keep a proportion of any extra earnings/bonuses in order to incentivise you to go out and earn the extra money.

Some excellent advice from jjdecay there.

Regarding equity, the firm I work for would disregard the first £5000 of equity in a property, as it is not realisable (ie even if you were selling the property, that much would be eaten up by the legal costs and marketing costs involved). So based on the figures you have given, there would be very little equity to deal with. It certainly doesn't seem like 5 years should be necessary.

Hi Snooze,

Kevin has highlighted why it's important to speak with a couple of advisors from different firms to see exactly how a Trust Deed would work with them based on your situation. If you do have a small amount of equity some firms will disregard this which would effectively mean that your Trust Deed's would only run for a 4 year period instead of 5 years.

As silly as it sounds it can really work in your favour to speak with a couple of advisors/companies about your situation.

No problem Snooze, I just wish I'd found the forum before I signed mine, instead of when I started to panic a week ago! (annual review in progress, and it's taking a while - I keep thinking something must have gone horribly wrong somewhere, and it's all going to collapse). you can always email me direct (there's a link on the posts to do this!) if you need a bit of support. Only 2 friends and one manager know about my Deed, so I know what its like to feel there;s no one to talk to about it!

Biggest challenge for me: Day to day work expenses - I don't think I'd ever really considered how much I was spending on stuff like lunches (nowhere cheap near work to buy, and no fridge or similar at work for packed lunches), suitable clothes and shoes seem to be incredibly pricey, and there's always charity requests, team nights out, leaving do's etc that I can't really afford.

But I'm telling myself that I'm a 12 months in, I've got 46 months to go (maybe even less if I can chip away at the equity faster somehow) and then I'll be free - I won't be afraid to open my post or answer my phone in case it's about money, and I can daydream now about how I'm going to spend the current contribution payment I WONT have make each month in future!

JJ

Thanks David, I have only got to the 2nd stage nothing has been agreed so would I be able to contact both you & Kevin for details of what you could recommend ? I don't want to mess people about or waste anyone's time I just want to know I'm doing the correct thing
Thanks everyone

Hi Snooze,

Don't feel like you are wasting anyone's time or messing anyone around. As advisors it's our job to give people advice!

To speak with any of the advisors recommended on the forum you can click the ÔÇ£contactÔÇØ button.

Some really useful information JJDecay! Thanks for taking the time to share your situation and help Snooze with advice.