Hello
Recently began my 5 year Trust Deed in October 2015, long road ahead but at least I've started the journey.
I am wondering what should my credit file show for each of my creditors on a monthly basis, is it a constant default that will be recorded every month going forward? That seems to be what is happening but just wanted to check that is correct, I did notice a couple of them are still shown as "late payment"
Many Thanks
Hi jamesmcn and welcome. Congratulations on taking this step to tackle your debts.
Hopefully some people can share their experience of what showed up on their credit files while in a trust deed.
My message to you would be to totally ignore it.
It wouldn't normally be appropriate or sensible to borrow any money until after you're discharged. Once you have been discharged, you'll be able to look at your credit file and contact your creditors to correct any inaccuracies. There really wouldn't be any point in doing that just now.
Hi jamesmcn,
Well done on taking a positive step to deal with your debts.
As TDA has advised until you are nearing the end of your Trust Deed I wouldn't worry too much about how your credit rating looks. It's as you near then end and after you have been discharged that you want to ensure that it's accurate.
In terms of your Trust Deed, is it over 5 years because you have an asset to deal with?
Many people start out feeling like it's a long road ahead but before you know it you will be half way through then nearing the end back on the forum asking about your discharge, credit rating and Form 5.
David is not currently posting in the Trust-Deed.co.uk forum
Hi both
Thanks for that, that's put my mind at ease just to wait until the end, there was only £202 equity in my house, and I've signed the form 1b and my understanding is that's for the trustee to relinquish their interest in the property?
Due to the level of the debt and my proposed monthly payment, I was advised that I would need to extend it to the 5 years, does that sound right or have I been ill advised?
I only found this forum/site after signing up with my current IP or I would probably have gone with one of the companies recommended on here.
Hello jamesmcm
TDA's advice to ignore it for now is good.
Different creditors report it slightly differently.
The Trust Deed remains for 6 years from the date of signing and that is the over-riding record.
The other individual creditors can be approached when you are discharged (if necessary) to have your file marked as Settled or Partially settled and the Default date corrected to match the Trust Deed.
Advice is the same as TDA, and I have gone through the process. Ignore it for now and deal with it when you are discharged. You will have a year to have the details corrected.
Good luck in becoming debt free and getting your life back!
Hi jamesmcn
That's good to hear that you had a small amount of equity and have signed the form 1b. This protects you and your property providing you maintain the agreement.
Trust Deed are normally over a period of 4 years but can run longer dependant on a person's circumstances i.e. level of debt, ability to afford a suitable payment per month or if they have any asset value which they are paying over. A factor can also be the level of fees that that particular firm charges for the administration.
Were you presented with what payment you would need to pay per month over 4 years or simply told that it would need to be over 5 years?
Can I also ask how much your debt totals?
I guess for anyone considering advice to deal with their debts it's always best to speak with a number of advisors from different firms to see exactly how a Trust Deed would work with them.
David is not currently posting in the Trust-Deed.co.uk forum
Hi David
I was given the option of a 4 year payment plan with a higher monthly payment, but went for the extra year with lower monthly fees, is this a bad option to take?
The total debt was £21,435.
Thanks
My thinking was that as the TD stays on your credit file for 6 years from the date it was signed that an extra years payments would not harm this aspect? Although I do realize that it will take an extra year for me to be discharged and receive my form 5.
Also it was the more affordable option, the monthly payments proposed for a 4 year term were just too tight when looking at income/expenditure.
Thanks
James
Hi James,
It's not a bad option to take. It sounds like you have taken a sensible approach as you need to pick a plan which is affordable to you and one which you feel you can maintain.
Did anyone explain Sequestration to you or were you only told about a Trust Deed?
I'm currently advising a client who has in the region of £50,000 of unsecured debts. In order for a Trust Deed proposal to be accepted by the creditors that person would need to pay a payment above £200 per month for 48 months. Something in the region of £220 per month. I have also advised the client that a payment around £180 per month could be considered for a 5 year Trust Deed. These figures are based on this clients individual circumstances and creditors.
After working through a very thorough income and expenditure with the client which is how we work out a monthly payment, their budget shows a disposable income of £145 per month. Their budget is very tight and there isn't much room to reduce expenditure items.
Under a Sequestration as the creditors are not required to accept the proposal the payment is purely based on what the client can afford without thinking about the creditors accepting it.
If the client wanted to proceed with a Trust Deed then they would need to make adjustments and cuts backs to their budget to afford a Trust Deed.
The client now had 3 choice to make:
1 ÔÇô Enter a 4 year Trust Deed with a payment around £220 per month.
2 ÔÇô Enter a 5 year Trust Deed with a payment in the region of £180 per month.
3 ÔÇô Enter Sequestration with a payment of £145 per month.
Based on the clients circumstances it would make no difference to them if they entered into a Trust Deed or Sequestration. It would simply come down to individual preference.
I've also explained that there is a difference financially to the client between a 4 or 5 year Trust Deed and a Sequestration in terms of how much they would repay.
It's now over to the client to consider the options but they are in a position to make an informed choice as they know all of the information and facts in relation to all of their available options.
David is not currently posting in the Trust-Deed.co.uk forum
Let's hope the client doesn't opt for the unaffordable Trust Deed option then - surely the outcome would just be them struggling to pay their bills for another 4 or 5 years!?
Fire walker, just wondering if settled date should be the same as the start of the TD or the discharge date? If it's the completion date then all the default calendar dates have been showing for the 3 years the TD was in place so does it take an additional 3 years for it to disappear (meaning 9 in total) as opposed to 6 years from start of TD? Hope this makes sense.
quote:
Originally posted by Firewalker
[br]Hello jamesmcmTDA's advice to ignore it for now is good.
Different creditors report it slightly differently.
The Trust Deed remains for 6 years from the date of signing and that is the over-riding record.
The other individual creditors can be approached when you are discharged (if necessary) to have your file marked as Settled or Partially settled and the Default date corrected to match the Trust Deed.
Advice is the same as TDA, and I have gone through the process. Ignore it for now and deal with it when you are discharged. You will have a year to have the details corrected.
Good luck in becoming debt free and getting your life back!
worriedme
It makes perfect sense worriedme.
Default dates should match Start date of Trust Deed - signing date is the correct date.
In my case they varied from a few weeks after signing date to six months after, so I chased those that were more than a few weeks.
It depends how much effort you want to put into correcting them.
The entries should completely disappear from the report six years from the default dates.
If the dates are not correct, the Trust Deed will disappear on the correct date, and any accounts with incorrect default dates will remain until six years from each individual default date.
I hope that makes sense.