Hi sunflower1.

A trust deed provider has guidance telling them that they must be able to expect to return a dividend of at least 10% of the amount that is owed to the creditors based upon their knowledge of a case at the start of the trust deed.

From what is paid into the trust deed (by the client) they are therefore needing to generate the value of their own fees, their own outlays, and this minimum level of dividend to creditors.

Sometimes trust deeds run over a period of more than three years because the debts are comparatively high and the monthly contribution is comparatively low. In such a circumstance it might not have been possible for a trust deed to be set up without this extended term as the dividend could not be expected to meet the guidance.

Sometimes trust deeds run over a period of more than three years because the trust deed company themselves are charging above average levels of fees. In these circumstances, their high fees can mean that a longer trust deed term is required to generate their fees and costs and the dividend to the creditors.

A visitor to this site was "saved" from a five year trust deed last year when it was pointed out to them that another provider with lower fees would be able to make the arrangement work over the typical three year period.

Hi sunflower1

Trust deeds are standard 3 years however can be extended if the payments are low and the minimum dividend would not be reached. Was the extension discussed and agreed with you?

Mark

Hi
We were just told at the time of signing that it would be over 4 years but no explination was given and we did not know any different and it was only by reading other peoples experiances that we realised that most of them were only 3 years.

As previously mentioned sunflower1 there can be good reasons for the trust deed term to be longer than three years. Hopefully that is the case in connection to your trust deeds.

Your trustee will tell you why if you ask.

Creditors are looking to get back a certain amount from a TD to allow it to become protected. It's not the case that they will accept any old amount, no matter how small.

So if your payment is low it will take longer to build up the amount they require. If you had been able to pay a higher amount then the time would have been less.

That's the way I see it anyway.

If you had been able to pay a higher amount then the time would have been less.

...should have been...

If you had been able to pay a higher amount **per month** then the time would have been less.

Rather than start a new topic I thought I'd latch onto this one.

Is it possible to reduce the term?

If you earn a bit more money near the end and increase the payment, would they just take more money and keep the duration the same, therefore increasing the "pot" for the creditors or would/could they reduce the term?

Also, does the duration of the TD start from when it was granted or protected?

Hi mapleleaf.

A trust deed results in the write-off of debts that you cannot afford to repay. Therefore an increase in income will result in a higher trust deed payment (for the same originally agreed term) rather than an opportunity to reduce the term of the trust deed I'm afraid.

It might be different if a third party came up with some cash; in certain circumstances this might help to bring an early end to a trust deed.

The term is usually based on the number of monthly payments made. So, if you agreed 36 monthly payments, the 36th payment would be the end of your side of things. Different trust deed providers have different policies on when the first payment should be made so the answer to your question (about start/end dates) will vary from case to case.