Hi Elaine

I wish I had great words of comfort.

I think the amount may be a problem to remortgage unless the actual value on the 3rd anniversary increases to a point that it gives the bank sufficient leeway to lend.

How much is your contribution & is there a 3rd party who could assist, should you be able to extend the Trust Deed period.

Mark

Hi Elaine

Deoending on the level of your monthly contribution, it may be possible to pay for the equity by extending your payments, as Mark suggested. With regards to the amount of equity to be paid, do you have anything in writing to confirm that it is the value at the beginning of your Trust Deed that has to be realised?

Many thanks for your responses. I have it in writing (at the beginning of PTD) the value due to be paid at the end - £18K. I currently contribute £286/month, I can extend, I believe for a further 2 x 12 month periods, but was not wanting to do this but it looks as if I may have no option as I cannot access this amount of money via 3rd party. If I do extend will my £286/mth be allocated to the £18K which means if I continue in this manner, then this will knock appox £6K off the overall amount and leave me £12K after the 2 year extension period? Which may increase the amount of equity I have available to release?

Appreciated in advance

Hi Elaine

Yes, any payment after the 3rd anniversary is paid in reduction of the equity.

Do you have any 3rd party who could assist. In an ideal world £500 x 36 would deal with things. Perhaps a third party could make payments just now. I have a case with £7k equity and the agreement is that the persons mother will pay £200 through the period of the trust deed which deals with the equity nicely on the 3rd anniversary.

Mark

Hi Elaine

Yes any payment after 3 yeas will got towards the equity, and reduce the amount you have left to pay. You ahve to loo at how you will get the remainder though!

The only option is that I ask my mother, she owns her house outright - could she take out an equity release scheme on her home to release £18K, but not sure how these release scheme's work. Is the money paid back after her death (god forbid) or can it be paid back via a repayment plan put in my mother's name - which I would pay on her behalf?

Hi EFING.

There is only so much we can say about equity release mortgages. They are regulated in a different way to debt advice and even mortgage brokers need additional specialist qualifications to advise on them.

However, if your mother is above the age threshold required then this could be a very valid option (if she is happy to go that way).

There are many varieties of equity release scheme and they can be very confusing. I'd therefore suggest that you seek out specialist advice on the subject.

It may very well be a good option given the circumstances though in terms of releasing funds to meet your equity obligations to your trust deed.

Do seek specialist advice before attempting an equity release mortgage,as other options may be better,for example a secured loan may be viable.

Can any of the IP's answer if there is much in the way of bartering allowed,for example if Efing was able to raise £12k through mum,is it possible to put this to creditors as an offer?

Also what is taken by trustee in regards to supervisory fees in the years after the actual TD payments have concluded and the incoming funds are to cover equity?

Clearly fees will be involved.

Paul

Hi Paul.

It sounds as though the equity was fixed and arranged at the start.

There is never any harm in trying to negotiate, but the trust deed firm may well conclude that the creditors should receive the amount that they originally agreed to when they allowed the trust deed to become protected.

If additional work is created, over and above that which was anticipated, the Trustee is likely to conclude that they should be remunerated for that extra work. If creditors don't agree with the extra fees there are mechanisms for them to get the fees audited externally.

Thanks for your responses. The equity was fixed at the commencement of the PTD, i.e After the survey there was £18K equity in my house at the time (2 years ago) and this amount remains fixed through-out the term of the PTD, ie is not linked to any increases/decreases in equity during the PTD term. Therefore, I don't know if I would be in a position to negotiate at the end, I think my TD advisor advised that there would be three options (1) I find the money by means of loan/remortgage/3rd party (2) I extend for 2 years or (3) declare bankrupcy - which is a route I do not want to go down, and went the PTD route at the outset.

I don't know if there are any specific lenders who would agree to lend directly to me at the end of the PTD. My mother is 74 years of age, and asking her to release equity would have to be my last resort, would prefer to fix myself (somehow).

Q - If I was to take a higher paying job which would then give me the option to increase my last 12 monthly payments - would this come off the equity or just go directly into my PTD. Would I be better holding off going for a higher paid job after my PTD 3 years, as then any additional payments that I make will go directly to the balance of TD???

I

If your income went up prior to the final payment this increase may just go into the pot,the equity figure is a separate issue.

Remember you owe the full amount of your debts throughout the TD,not just the amount that was agreed to repay.

Is there a higher paid job out there with your name or it,or is that wishful thinking?

A whole of market broker may be able to help you find a remortgage but it will all depend on loan to value ratios etc.

It may also be worth asking your current lender,just so you check all your options.

Paul

Hi EFING.

I think you'll struggle to find a mortgage lender prepared to extend the amount lent to you during a trust deed. There is no harm in at least asking a broker to look at it though.

Paul is correct about what would happen if you got a higher paying job. During the agreed term of the trust deed this would result in higher contributions, but the increase would not count towards the equity. Once the agreed term was finished you'd be in a better position to repay the equity.

Given the state of the job market, if there is a higher paid job available to you now I'd be tempted to go for it.

Hi Efing

Only payments after the 3 years go towards equity. However, if there is a better paid job out there now - grab it, it may not be there later on! Your Trustee can approach creditors to see if they would rather have £12k now, or £18k over a few years, so if you can get the £12k right away, the creditors/Trustee may accept it. It is always worth asking.
Hopefully this should not be such as issue in the future (for people who have signed Trust Deeds in the last few years,) as they should be advised at the beginning that re-mortgaging is not an option in the current climate.

I assume this lack of remortgaging is meaning that a trust deed isnt an option if decent amounts of equity lie in the home.

I fear than many people will pay into a trust deed for 3 years only to end up having to sell the house to release the funds.

Paul