Hi mac70,

I'm not sure the fact the documents are on plain paper makes any difference - these are probably just your copies and there will presumably be copies held by the trustee too.

As trust deed assistant says, your trust deed was set up at the start based on a certain amount being paid to your creditors and they accepted it on that basis. If this is no longer available then your trustee could advise creditors of the change and the reasons for it (ie housing mkt) and a compromise could be sought. However, if your trustee is adamant that the full amount of the initial equity has to be ingethered then there may not be a great deal you can do about it except argue your case in court if they chose to try to sequestrate you instead or to terminate your trust deed without discharging you from your debts.

So let me get this clear, even though there is no equity in my house, if I cannot get a comprimise agreement or raise the 8K I could potentially still go bankrupt or the deed could be terminated and after 3 years of paying my Trust I could end up back to square one... is that correct.
If it is, if I went bankrupt now, would I still have to then pay a further 3 years to the sequestration?

Hi mac70.

If you agreed to pay a fixed sum of £8k at the start of your trust deed, and your creditors agreed to your trust deed on that basis, the fact that the equity in your home has reduced could be seen as irrelevant.

If the property still had that equity in it your challenge would be little different to your current position; you'd need to raise £8000 to bring the trust deed to an end (unless as Kevin and I have suggested you're able to negotiate some sort of compromise based upon an amount that you can raise).

Sequestration isn't open to you unless you are discharged from your trust deed with some or all of your debts still owing. If it becomes open to you the position would be that your income and expenditure would be assessed and you'd be expected to pay over what you can afford for three years.

To be honest if the equity was in my house, I would be more than happy to pay it as this was my commitment at the beginning of the trust.

Thank you and Kevin for your advice it has been very helpful... I will let you know how I get on...

No problem mac70.

My point really was that you'd still have the same challenge to raise the money; the type of remortgage that was available a few years ago to pull all of the equity out of your home while still in a trust deed simply doesn't exist now.

I think the route of trying to find a compromise is likely to be the most productive. Some other members of the site have had success doing this where they can come up with something to offer and make a commercial case to the Trustee that the offer is the best outcome available for the creditors. The fact that your home no longer has equity should be helpful in making such an argument I think.

Hi mac70

This has been a really interesting read. As you have been told, equity was frozen at the beginning in order to protect your home, and stop the equity increasing. It is difficult when the table is turned and you are now being penalised by the very clause that wa set up to protect you.
If your income has been reduced, then as TDA said, your contributions should reflect your current situation. It shoul dnot be a matter of you have to pay the same contribution regardless - not if it is through no fault of your own. You mentioned that a family member is prepared to help. Why not ask them to put an offer to your Trustee for the equity, rather than the missed payments? That way, at least your house would be out of the equation.
I have mentioned before about Trustees ending Trust Deeds unfairly, and I think you should not be punished for a change in your disposable income if it could not be prevented, or the fact the housing market has gone into decline. I would hopethe Trustee is open to offers, otherwise everyone is going to lose out here, including creditors.