I would echo Shona's comments. We normally speak to a surveyor informally first in order to get an idea as to whether we are in the right ballpark in terms of equity, then have discussions based on this. If the person is keen to go ahead then we would get a proper valuation done before the Trust Deed is signed. As Shona says, nasty surprises after a trust deed is signed is in nobody's interest.
Ditto the £5k allowance too. Creditors are invariably happy to accept this arrangement and it can really help to make a trust deed viable in many cases.

hi everyone
This is the first time ive posted and would like some advice.my husband and I are in a td it became protected on 23 may this year.We have to make 2 payments of 250 pounds by 23 september this year to protect the equity in our home which was valued before we signed the td and we have negative equity.we are finding it difficult to come up with the money can any one suggest any other proposal that may be accepted by my trustee to stop them re valueing the house at the end.Any advise would be great.

Welcome no.1mum.

Some trust deed companies will accept smaller installments so you could always ask about that. The idea usually though is that a third party comes up with the money for you.

Just for other readers, there is no need at all to pay this £500 to "protect the equity" in a trust deed. Lots of companies (including the three that are represented here) will do what amounts to exactly the same thing without this charge so long as there is no equity at the start of the trust deed.

hi no1mum, and welcome to the forum,

as TDA said not all companies charge a fee now, but i dont suppose that helps you. I would welcome the others opinion on this, but i was of the opinion that since 15/11/10, the equity should be frozen (crystalises) at the date of sequestration or Trust Deed. That is how we work, so it doesnt matter when you pay the £500. Kevin, Mark, TDA?

hi everyone
thanks for your advice.I have contacted my tdc and have arranged to make instalmets over the next 10 mnths.The 500 pounds has to be paid within one year of signing,I wish i had known before hand about the situation with negative equity and not always having to pay 500 pounds .My tdc have said that if this isnt paid in to the td they would revalue the house at the end .I just have one more question can they do this if the equity should have been frozen at the start or is that what they are charging the 500 ponds for?.

Hi no.1mum.

Practice in this respect seems to vary widely from firm to firm. The key point really is what you and your creditors agreed to in your trust deed. It doesn't sound as though anything in any way "wrong" is happening according to your description of events.

Hopefully these installments will be affordable for you?

Hi Shona

I am unaware of any guidance or legislation that states this. I think the procedure adopted by your firm and mine is sensible. It amazes me that some firms get away with this stuff. I wonder if they calculate the surplus income for contribution, but allow a deduction for paying the fictitious £500!

Mark

To play the part of devil's advocate, I don't think these firms are trying to get away with anything. The £500 third party payment was very widespread accepted practice in trust deeds for a long time and has only recently become less so. Presumably the funds go to creditors and in my former life as a money adviser I found that clients were on the whole quite happy and felt that the arrangement gave them some peace of mind that their property was safe.

You are right Kevin, most of us did the £500 per house buy-out until very recently. It still applies in Sequestration, so folk should probably be aware of that, just in case their Trusd Deed fails.