Welcome to the trust deed forum skintfornow.

Your thread raises a number of issues which I'll try to break up:

If your wife is no longer working there seems to be a question about how her trust deed is now being funded. Effectively, it's probably the case that your creditors are now subsidising the payment of her creditors which could be seen by them to be unfair. It's probably a good thing for the two of you that this hasn't been raised as an issue by your trust deed firm (perhaps some flexibility is being shown to you as you're so far into the trust deeds already).

That begs the question however of how your wife is funding the saving of £50 per month if she has no earned income? That basically means you are taking £50 which perhaps could have gone to your creditors and giving it to your wife. I can see why a Trustee, who you appointed to recover for creditors what is affordable for you to pay (which can and often does change during a trust deed) might take issue with that.

As the deduction of £100 from your salary is voluntary, the trust deed firm will not see it the same as other deductions such as tax or national insurance. It's just £100 of earnings which forms part of the overall picture of earnings along with your take-home pay from which contributions should be based.

You make a fair point about your expenditure figures. £400 for housekeeping seems very much at the low end of expectations for a family of five persons for example. I wouldn't rely too much on the figures you might find online for budget figures; they are often not the ranges used in trust deeds and are often out of date.

My question in terms of the £400 for household would be is this a figure that you originally (or recently) submitted to the trust deed firm or agreed to?
A common principle is to use reasonable figures provided by a client to set up the expenditure figures. The expenditure "ranges" only really come into it where a client suggests a figure too low to cover their likely needs or too high to be likely to meet creditor perception of fairness.
If you suggested these figures as being your real spend then you might have a bit of a battle to now increase them. If they have been arbitrarily set for you by someone else, I'd say you have a fair argument that they might be increased a bit.

You can save during a trust deed. In fact it's encouraged. You should have a budget for occasional expenditure such as car repairs, home repairs, car tax, emergencies and contingencies etc etc. This money should be set aside where possible so the cash is there when the need arises. There is no principle that says you cannot save from within these reasonable agreed budgets. In terms of your savings therefore, the quetion seems to be about scale rather than whether you can save at all.

Your point about the savings being subsidised by your household budget is really one of perception. I can see where you are coming from. I can also see why your trust deed firm might see your savings being subsidised by your creditors rather than by your household budget.

Could you let me know who provided the figures for household expenses, clothing etc? There may be some scope for you to ask for the budgets to be looked at (especially given recent cost increases) and we might be able to give you some pointers on that.

Making sure you have enough money to cover your needs is in the best interests of you. your creditors, and your trust deed provider. I think this issue does need to be slightly seperated from the issue about participation in the company saving schemes though.

Thanks Trust Deed Assistant for your reply. To respond to the issues that you raise:

1 My wife does not contribute £50 to the share schemes. There are two share schemes (hence £50 each) into which I am paying directly from my wage.AS Istated in my earlier post one of these is a scheme where you pay money into a savings account held on you behalf for a specified periodof time. At the end of this period you can take whatever has been saved and use it however you please or you can buy shares. You can stop paying into both of the schemes at any time and in the case of the saving scheme your money can be returned.

2 My wife is funding her trust deed via a combination of tax credits and child benefits that are paid into her account - this was made clear on the last status report that she filed. Since the move there has not been any missed payments. There has not been any comeback from the trustee on this. I assume that this is acceptable. The alternative would be for her to return to work - a situation that would lead to 70% - 75% of her wages being used to pay for child care (fullt time nursery fees, before and after school care) and when the obligation of the TD is added onto this it would mean that up to 80 -85% of her wage would be used up before she could contribute to the household budget. In addition the tax credit would also be lost since total household income would be deemed to be above the threshold for tax credit payments. We know this from practical experience since this was the situation before we moved.

3 You state that the budgeting guidelines used by trust deeds are different from those commonly found on the internet. I recall in one thread that you mentioned the Consumer Credit Counselling Service (CCCS)guidelines and how you are not allowed to publish them on the internet. Are these the guidelines used by IPs?
However an internet search for them yields, as PDF documents the CCCS guidelines going as far back as 2009. The housekeeping budget in my previous post includes all the things that are found in a housekeeping budget but also includes school meals for the two children at school and meals at work for me. The CCCS guidelines separate housekeeping, school meals and meals at work. When those CCCS figures are used my housekeeping (school meals and work meals) budget is some 20 - 35% less that what is recommended by the CCCS. This also applies to all my other expenditures - all significantly below the CCCS guidelines. Indeed the sum total of my expenditure figures is below the sum total of minimum expenditure values provided by the CCCS. The question then becomes if my expenditure is well below the CCCS guidelines how is it that this has been missed by the IP and how the IP can arrive at the conclusion that there is surplus income. I appreciate that the IP or IPs in general are not duty bound to follow the guidelines to the letter, but it would appear that the £100 spent on the share plans has been like a red rag to a bull - the fact/s that my expenditure is below the minimum guidelines would appear to have been ignored.

4 I must also stress that we have no other savings - a fact driven home when the car broke down irreparably in September - it was only the intervention of a family member that saved the day. The lack of savings/contigency fund is clearly illustrated in my (our) status reports. (At the risk of repeating myself, one of the share schemes is essentially just a form of saving!!) But yet again this appears to have been missed in reaching the conclusion of surplus income. This then begs the question - whose interests does the IP look after - solely those of the creditors (and his fees ) or is it the creditors, his own (fees) and mine?

5 The budget figures on my expenditure sheet were not supplied by a third party but rather are based on what I can only describe as cutting my coat according to my cloth given my obligations to the people that I owe money to. I would welcome any pointers/ help that you may be in a position to give.

Be that as it may, the fact that I have set these figures myself does not detract from the fact that by comparison to those set by impartial observers, my figures are somewhat light relatively speaking. Who then other than the IP, who allegedly has my interests at heart alongside those of my creditors and his/her own, would sense check these figures - it seems highly odd that an IP would not only seemingly accept low values(below minimum as per CCCS?) on the back of them (the figures) being set by an indebted person but refuse to amend them when they (the figures) are shown to be significantly below guidelines set by impartial observers. Is it the case that so long as you can pay the agreed amount to the IP then one is free to set budget values that leave one on the brink of a hand to mouth existence? Again whose interests does the IP look after?

That said, there is no question of my shirking my responsibilities- I find myself in debt as a result of the choices and decisions that I have made in the past. I fully accept that I must pay pack as much of this debt as I can possibly afford.

Apologies for the long missive!!

Thanks for clarifying about the contributions to the savings schemes; I had misunderstood that skintfornow.

The CCCS guidelines are used quite widely by debt advisers, trust deed firms and creditors. What sometimes gets misunderstood is how they are used (or how they are intended to be used). The theory is that an individual (or couple) provide information about what they really need to spend and that these numbers are used wherever possible. The upper and lower ranges of the CCCS guidelines are meant to come into it where the adviser is concerned that someone is not leaving themselves enough to live on, or that they need to cut back on a certain area to gain creditor support.

Should your "expenditure" be set a long way below the guidelines? Probably not of course. You are correct that often seperate allowances would be made for things like school meals and meals at work. The figure you provided seemed very low for a family of five even before you mentioned that these expenses were included as well.

The other side to this, from the perspective of your trust deed firm, is that you have been living to these allowances for two years now. You can presumably see how they might now feel that you are able to live on this budget (not a position I would necessarily agree with by the way)?

Would you have any surplus income if you used the guidelines? If not, would you be prepared to abandon the trust deeds and seek sequestration?

The job you appointed your Trustee to do is to recover what you can afford to pay towards your debts. They have a duty to be fair to you and your family while doing this though.

I'm still not sure that this is really about the savings schemes; that seems to be the issue that has brought these other things to light.

You seem to be in a pretty good position to request that your expenditure allowances be reviewed in line with the guidelines generally adopted. However, you'll need to think through in advance how you will explain the fact that you've lived to these allowances for two years and that you've been able to save £100 per month as well.

I do wish you well with that and hope that the budgets are amended in a way that helps you to work through the final stages of your trust deeds and get the fresh start that you've worked so hard for already.

Thanks yet again Trust Deed assistance for your reply.
To clarify - the epxenditure figures supplied in the latest review were not the ones supplied at the start of the TD and at other reviews. To explain - at the start of the TD we only had the two children with the third child being born a few weeks after the TD had been signed. At that time my wife was in full time employment - hence there were two wages coming in ( yes there were child care issues but only in the sense of after school care). Childcare expenditure increased with the arrival of the new baby hence the 75% spend of my wife's wages on childcare described in my previous post. My wife was able to contribute some ~12% of her wages to the house hold budget. The situation changed in August due to my having to find a new job ( with better prospects) as my previous job was under threat of redundancy.

I find it interesting that you state that the trustee has a duty to be fair to me and my family - the designation of the £100 (for the share plans) as surplus to be added to the TD contributions in the light of the expenditure sheets supplied to the IP, and as well as the fact that there has been an overall reduction in household income does not exactly scream fairness.

On the issue of affordability of the TD using the CCCS minimum guidelines (and the £100 that I have chosen to save), my own calculations show that the £220 payments I am currently making are just about affordarble and when the mid-range values from the CCCS are used affordability of the TD falls to circa £150 (from £220). However all is not lost; upon completing six months in my new job I am due to receive an additional allowance that would add between £180 - £230 to my monthly wage.

I intend to write to my IP, shortly - your responses have helped me to think through what it is that needs saying and how to say it.

I think this thread illustrates the fact that an IP has a difficult role in trying to work with those with a PTD while also seeking to secure the best option for creditors. As other threads have shown, pay increases/bonueses/windfalls/casino wins (!) are effectively declarable income over which the IP has a serious degree of control, invariably to the benefit of creditors.

Forgive me if I have misunderstood, but am I right in thinking that you told your trustee that you only need £400pm for housekeeping? Whilst I agree that this is very much on the low side, it is actually above the minimum figure on the CCCS guiselines that you mention, so the trustee is likely to have accepted your figure on that basis. I guess there is always the option to go back to them and say that you have miscalculated and actually cannot manage on that figure after all.

Regarding your savings, as trust deed assistant says, some saving is encouraged by many insolvency practitioners, as a way of being able to cope with unexpected expenses etc whilst in the trust deed. There is no requirement to allow this and no hard and fast rules as to how much is acceptable. Maybe your trustee views this type of sharesave scheme as a longer-term investment and therefore harder to justify than an allowance to be put aside each month for "contingencies"? I'm just guessing.

I imagine that with a bit of communication between yourself and your trustee you should hopefully be able to work out these differences. Best of luck.

My OH has a similar scheme with his employer and I think £50 a month is taken directly from his salary. We talked this over with our IP from the beginning and sent them a copy of the paperwork etc. We also calculated how much it would be worth if we cashed it in "today" - not a lot as he'd lose bonuses and free shares etc. However, and we've been assured that this won't happen but you never know, we worry that when the 5 year term of the scheme is up and we have the opportunity to take the money and run or buy the shares, our creditors will say "thank you very much, we'll take that!". Not that we'd try and diddle our creditors but we'd rather increase our monthly contributions by £50 so that we'd benefit from any bonuses.

So long as this has been covered in advance with your trust deed firm it's hard to see why there should be any issues pammy1969.

What feedback did you get?

Some schemes may vary however for anyone interested
SAYE/Sharesave schemes usually work in the principle that you save a fixed amount monthly for 3, 5 or 7 years and the amount saved is used to buy shares at a discount - usually 20% of the share price determined before the share scheme year starts. The bonus number of shares you receive depends on whether the term is 3, 5 or 7 years but the bonus is very small these days. You can always cash in the share save scheme without penalty at any time and you get ALL monies paid in up to that date with some (minimal) interest applied. At the end of the term you can take the cash or use the funds to buy the discounted shares (if the share price drops you would always take the cash option)so you can't lose any of your investment.
I wouldn't use this as my sole means of saving as it can take a couple of weeks to get your money back.

That's a good point cannypay.

The purpose of an emergency fund requires that you can get at the money quickly if it's needed.

quote:

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Originally posted by Trust Deed Assistant

So long as this has been covered in advance with your trust deed firm it's hard to see why there should be any issues pammy1969.

What feedback did you get?

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Evening TDA

Our IP "suggested" that perhaps "our son was paying this" [;)] in lieu of board money. He didn't seem concerned at all but wants to make sure that he can justify the deduction to any creditors who might question it.

OK!!

Well, at least you know where you stand.

quote:

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Originally posted by Trust Deed Assistant

That's a good point cannypay.

The purpose of an emergency fund requires that you can get at the money quickly if it's needed.

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Trust Deed assistant - what is the definition of "quickly" Indeed what is the definition of emergency? For example your car breaks down you have the money to repair it relatively quickly is not my view an emergency but the same car breaks down and you have no money to carry out repairs would be an emergency. Its not quite the same to ring up your boss and say "my car has broken down and I have no means to get it repaired in the foreseable future" as it is to say "my car has broken down and I would be able to get it fixed in a week/ two weeks time" or whatever time is rquired.

Surely the important thing here is that you have access to your own funds rather than having no money at all. Imho whether that money is available in two or 24 hours or 1 week or two weeks is secondary to having it in the first place since it averts the possibility of getting into even more debt.

It is interesting to see that other folk in TD appear to have been allowed to participate in share saving schemes albeit in some instances with a nod a wink [:D] [:0].
Does it mean that those IPs are not duty bound to secure as much money from the debtor as is possible ? The lack of consistency is somewhat alarming since it suggests that it all boils down to the whims of the individual IPs and so depending on which side your IP has got out of bed "saving" via share schemes is deemed surplus income! What a crazy world this is!!!!

Kevin

quote:

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Forgive me if I have misunderstood, but am I right in thinking that you told your trustee that you only need £400pm for housekeeping? Whilst I agree that this is very much on the low side, it is actually above the minimum figure on the CCCS guiselines that you mention, so the trustee is likely to have accepted your figure on that basis.

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The £400 is housekeeping + school meals for two children + work meals for one. Using the minimum CCCS figures (assuming that, being a layman and not an IP, I have been able to work out the highly complex mathematics properly [;)]) this comes to ~ £450.

My impression is that a lot of 'issues' vary between one IP and another not necessarily between one day and another. The uncertainties seem to be things that are best discussed , agreed on and written in to agreements at the outset so you don't have any surprises which can seem 'whimsical' The IP firm may have a set policy on how aspects of a TD are dealt with which may change in light of new legislation or for commercial reasons but will change for all. That's my understanding from various posts.