Hello smithlouise161 and welcome.

If your circumstances improve during a trust deed, or you receive a lump sum, it is possible that you end up repaying more than the original debt total. Only debts that you cannot afford to repay end up being written-off by a trust deed.

The most that you should have to pay will be the sum of:

1 - The original debt total.
2 - Interest on those debts.
3 - The fees and costs of your trustee.

I'm not sure that the point of a trust deed is specifically to help people clear debt - though I appreciate how people might form that view given some of the advertising that's out there. The purpose (as I understand it) is to create a compromise whereby a debtor that does not expect to be able to fully repay their debts offers to pay what they can to their creditors. The creditors, in return, agree to write off anything that the debtor subsequently cannot repay.

As such, if circumstances improve, the creditors might be fully repaid and receive interest (as they would have also according to the original credit agreements made). If it becomes affordable for the debtor, the creditors would also not expect to bear the cost of the trustee fees (which would fall on the debtor).

Trustee fees can seem very high - but you should have been made aware of these in the paperwork that you signed at the start.

Can I ask how much your debts were when you signed your trust deed?

This might help us to give you a sense of whether an earlier finish might be possible for you given that you've been so successful in increasing your earnings.

Hi thank you for your reply. None of this was ever explained to me at the start of the Trust Deed, it was all done over the phone. I was in a desperate situation at the time and just wanted it all dealt with quickly, something I am now regretting.

As mentioned above my debts were £13,574 when I signed the Trust Deed but that included over £1000 for any unaccounted for debts.

Thanks.

Sorry smithlouise161, I just noticed that you supplied the debt figure already (£13574).

So the total that you might end up paying would be £13574 plus fees (£6000) plus interest (which will depend on how long things run for).

Excluding the interest for now - £20000 (debts plus fees) minus £3400 (money paid already) = £16600 remaining. At £600 per month that would be cleared in another 28 months.

With interest to be added it doesn't look like much of a reduction in the overall term of 60 months is likely I'm afraid.

Does your trust deed provider agree that £600 per month is now the appropriate payment level after your pay increase?

I think we were writing at the same time - thanks for confirming the figure.

Oh really, that's not what I wanted to hear but lesson learned, I wont rush into things in the future without knowing all the facts. I would have been better without Trust Deed then as I now have an extra £6000 to pay on top of original debt and interest.

The letter I got was asking for an extra £62 a month from me, but since January my salary has increased again as I move up a pay scale each April. Also I no longer have a car so my expenditure is a lot lower. I gave them a call to update them and they anticipated my monthly payments to be over £450 a month but would need to confirm once I sent them the requested documents.

I am now eligible to join my company pension scheme, is this allowed as monthly expenditure item and if so is there a limit?

Many Thanks

L

Hi again.

Your trustee may allow a modest level of pension saving, not least because your creditors currently stand to receive a much higher dividend than originally expected. I'd discuss this directly with your trustee.

In terms of the wider question you originally asked, I'm sorry I couldn't give you more welcome news but I hope it helps you to understand why things are being presented to you as they have been.

Thank you for your help.