I think there are a couple of themes arising in this thread that have been heard many times over the years that this forum has been running.

Charlie1958 has perfectly illustrated the benefits of being able to plan for any equity responsibilities from the start of the protected trust deed. Each of the trust deed firms that posts here, and many others as well, will set a figure due for equity at the start of the trust deed so that people know where they stand and can plan accordingly.

Tompie1980 makes a strong point as well. Many writers in this forum have written about how, with hindsight, they may have viewed things differently and made different enquiries ahead of signing a trust deed. The reality is that many people immediately before signing a trust deed are in a very difficult situation and naturally reach out for help there and then from firms that are offering it to them (sometimes to their regret later).

Obviously we can only advise people that the best way to protect themselves is to take their time, ask loads of questions, get things in writing, and choose a trust deed firm that they have a reason to trust. However when people are feeling financially vulnerable the reality is that they will often put their trust in the firm they are speaking to there and then. In my opinion this only places an even greater responsibility on the firms that operate in this market to do the right thing and be fully open with people about the negatives as well as the positives associated with trust deeds.

Anyone who knows that they have equity in their home needs to be very careful about deciding that a trust deed is right for them. They should be especially watchful of the "don't worry about it your home will be safe" or "don't worry about it we'll sort out a valuation that means there is no equity" brigades that are operating out there. Equity will need to be dealt with by the Trustee so if it exists have a plan in mind as to how it will be raised, or consider whether in fact another option like the debt arrangement scheme is a better fit for your needs.

By the way, there really is a firm of intermediaries currently telling many of their homeowner potential trust deed clients that they'll "fix" a valuation which proves they have no equity (even where there clearly is lots of equity).
I will not name them, but numerous callers to our advice line have mentioned the same intermediary firm by name which is doing this.
I worry that in three years time we'll have some less fortunate and more trusting posters on this forum asking why they are having to pay over significant amounts of equity following a valuation organised by their Trustee at the end of their trust deed.

So should a valuation be done on a property at the start or end of a trust deed then? Ours was done at the start and we had to pay £500 so that they wouldn't revalue the house at the end (negative equity).

Hi gillianr2.

We hear of both happening.

Dealing with the property at the start makes sense so that people know where they stand, can plan, and there are no nasty surprises later. As discussed many times here there are plenty of firms that will deal with a property in the way that you describe but without charging the £500 fee you mention.

The other thing worth considering is that when the £500 is paid (or the same thing is done without the £500 fee) this is working on the presumption that all will go fine with the trust deed. If something goes wrong, for example the client ceases to comply with reasonable requests connected to the trust deed, the property may come under consideration again.

I can only add that my IP made explicit that equity would have to be factored in as part of preparing the PTD - it was not an add -on or optional extra! But having £900 as as monthly mortgage payment to meet was a giveaway and could hardly be "explained away" when it came to outgoings etc. So knowing on (near) day one my total commitment allowed me to plan accordingly, I greatly sympathise with those to whom this comes very late in the day. Hopefully, a few benefit will benefit from my experience and tompie1988, and TDA's words of reason when they read this forum in the future.

Ah I see so if for instance you didn't comply and the house then had equity in it at a later date then they could still consider taking the house. Makes sense really. We dont have to worry about that, our house is worth even less now.

I have just completed a letter back to my trust deed stating that I am happy to pay the 6141 equity and arrears that I have outstanding and they know that I plan to get this money from my sister, however my sister want assurances in place that I will pay her back as this is now the 2nd time she has gave me money and I could not giver her it back first time. I have agreed that when my trust deed comes to an end in Febraury that I would then pay her £150 to show I can make monthly payments showing her that I can pay it back. Once 6 months has passed and I have proved that I can pay then she will release the money to my trust deed.
The problem I have is my trust deed are now saying they want to increase my contributions to £200. I cant afford to pay this plus pay my sister showing her that I can make my payments.
It just seems to be one thing after the other with WA.......

Could you try explainign this to the trustee? Doesn't sound like they would be too sympathetic to be honest though. I wonder if the trustee would agree to a 6mth payment break to allow you to do this.

I never thought about a Payment Break that would be a great idea. I will put this in the letter also. Thanks Gillian

Hi tompie1980.

I'm not sure that this plan is going to go down very well with your trust deed firm.

I doubt that they'll feel able to make an allowance for a monthly payment to your sister towards a new debt (that in fact doesn't yet exist). If you have arrears on your trust deed they're duty bound to collect from you each month what you can afford to pay.

Hope I'm wrong but I think you should speak to your sister about whether this can be structured in a different way. Perhaps she could take some comfort from the fact that you have been making your trust deed payments, and that once she has supplied a lump sum this is money that will then theoretically be spare and available to repay her?

I do see what your saying TDA. I am going to put this in a letter to them and see what they say. I want to be able to pay my sister back and show her that I will repay her this time. She is not well off but is willing to do this for me as everyone deserves a 2nd chance. I will not let her down this time but she is adament that she wants to receive some sort of payments from me for 6 months before she make a payment for such a big amount. I do understand that the WA do have to get this money from me and I just hope it gets sorted sooner rather than later..

Hi tompie1980

This is a difficult situation. You have done well to reduce the amount of equity, but it is still causing a problem. I agree with TDA that I am not sure if your trustee will give you apayment break, but please let us know the outcome.

Ok so I've just sent the letter away today. Asking for the 6month break or to continue it with minimum payments until the payment has been made. If they insist on makeing me pay the £200 then I will pay it for the extra 21 months and then just give them the equity money. I will keep this forum updated with any outcome.
It does just show though never take there word for it and it pays to do more enquiring like what I done. Thanks again..

fingers crossed tompie1980

Ok just got word back from Wilson Andrews to advise that they will continue to take the contributions from me however will take this of the final amount that I owe. They have reduced my payments to £150 per month.
So what will happen now is I will continue to pay the £150 per month and once my sister can afford to give me the loan of £6250 then I will pay the trust deed this money then I will be free from the Trust Deed and then just in debt to my sister for £6250 which I will be paying over 5 years to her. I feel like a big weight has been taken off my shoulders, I can see an end to this now. Hopefully come August 2012 then I will be completly debt free apart from the loan to my sister. Suppose this is better than nothing. In total I will have paid in to my trust deed £11650 and the rest of my debt written off. Which is roughly about £15000 written off..

That all sounds very reasonable tompie1980, glad it is sorted out. I take it this means that the £150pm you are paying in the meantime is reducing the equity amount and therefore the amount you will need to borrow from your sister? Eg you pay for 6 months @ £150pm, so £6250 reduced by £900 = £5350 outstanding.