Hi billbaillie

The amendments are for Trust Deeds with little or no equity and require the consent of the mortgage holder to be excluded.

If there was equity within a property and a Trustee was to proceed on this basis, it is extremely unlikely that creditors would agree to the Trust Deed.

Its a nice idea in theory, but doesn't really add anything new to be honest.

Mark

Welcome to the forum billbaillie.

Is there a significant amount of equity in your home?

As you seem to be well aware already, this is an area that homeowners need to look into closely ahead of signing a Scottish trust deed.

Thank you for your help.

I do not have a significant amount of equity in my home. Certainly not enough to cover my debts!

Would creditors be more willing to agree to a Trust Deed, with the home excluded, if the equity was substantially low?

Hello billbaillie.

I think that the point is that creditors will be less likely to allow a trust deed to become protected if you were to go ahead on this basis. That's the perception of people we have spoken with at a number of trust deed firms.

That may not be a problem for you though, depending upon your circumstances.

The trust deed firms represented here by Shona, Mark and Kevin, and some others, will value your home at the start and effectively "fix" the equity position at that point.

If there is no equity the home is effectively left out of the trust deed so long as you meet your side of the bargain (even if it goes up in value).

If there is a little equity it may be possible to cover it through some extra monthly contributions, or by payment from a third party if that help is available to you.

By getting a valuation before you sign, if you find there is a fair bit of equity that will be difficult to pay over, you will still be in a position to consider other options.

Hi billbaillie

Trust Deed valuations come in lower than estate agent valuations, so it may well be there's nothing in it.

If that were the case the house would, by default, not be included Adam asset anyway. Generally same result, but far less complications.

Mark

Thank you again for the great advice.

I have contacted one company who calculate the equity based on 85% of the home value. Is this normal practice?

A rough calculation on 100% value shows an equity of approxiamately £14,000. Then again based on a lower than estate agent valuation this would be even less. Also based on the 85% offered from one company my equity, with a lower than estate agent valuation, would be nil.

Hi billbaillie.

Have you been speaking to an actual provider of trust deeds or some kind of intermediary firm?

A Trustee is legally obligated to ensure that the equity in the property is paid over to help repay creditors. We've not heard this 85% figure on the forum before, and the whole concept of an 85% figure is unfamiliar and strange-sounding to me.

Hi,

The company is RDS (Right Debt Solutions) whose details were given to me through scottishtrustdeed.co.uk. What is your opinion?

Thank you for all your help,

Bill

Hi billbaillie.

I wasn't aware that there was a link between these organisations. I believe both are intermediary firms.

I don't recognise the advice provided and I'm not sure an actual trust deed firm would provide it.

That is a bit worrying! An insolvency practioner through RDS is coming to see me tomorrow. I will be sure to quiz him first.

Hi billbaillie

Please ensure you sign nothing and also ensure the position re the property is fully confirmed in writing before you do anything.

Mark

Absolutely Mark, I will be sure to have written confirmation about equity. Can I have the valuation done before signing? Also should I have in writing an agreement allowing me extra time after the 3 years to pay off my equity (usually 2 extra years?)? Thanks for your help.

Hi billbaillie

Yes, please ensure the equity position is clear. None of the 'might be' 'could be' scenarios are sufficient.

It is the single most important part in my opinion and needs to be addressed at the start before you do anything.

Mark

Also ensure that the equity issue is dealt with and agreed in writing by the actual trust deed company you are using,dont just accept an introducers word for it(even if they put it in writing,as how equity is dealt with is of little concern to them!).

Get it right at the start and things will run as smoothly as they can,get it wrong and you may well find yourself in a worse position than you were to start with.

Paul