Hi John Black,

Your debts don't have to be more than £10,000 for you to sign a Trust Deed. As long as your debt is above £7,000, a Trust Deed may be a suitable option for you along with a DAS.

The less debt that someone has, the less benefit there is to both to them and to their creditors from signing a trust deed. The debtor may be having to pay in a sum not much less than the debt total anyway over the course of the trust deed. The creditors may be sharing only £hundreds rather than £thousands, with the vast majority of funds paid in covering the costs and outlays of the IP.

It is therefore much more difficult to justify that a trust deed is in the best interests of anyone other than the IP when the debts are very low. It is not that it can't be done, but I think there is an onus on the IP to be very careful and ensure that the trust deed is being signed up for the right reasons where the debts are less than £10000.

So we've come full circle and thank you all so much as I will now be able to make a more informed decision. I have to say that I'm slightly miffed that somebody who I think should know better was effectively encouraging me to do wrong - in fact to commit fraud according to one of you.

Had I done that and had it come to light I guess my TD would suffer in some way. I also guess that I'd have to take the blame.

Scary stuff!!

Hi john.

I think the phrase was that it "could" be construed as being fraudulent.

There seems to be a consensus here that this was inappropriate advice that was given to you. I suspect that the adviser was well-meaning in their comments... not that this really makes things much better.