i sarah95

Don't worry, it's a very common question and the answer is no, it is very unlikely to have an effect on things.

As much as I hate to say it, creditors follow a set formula for agreeing trust deeds and I have dealt with a large number of cases in the same position where it has not been an issue.

Mark

Hi Mark,

Many thanks for that. Its my catalogue account that's worrying me the most.

So, is it not likely that they will scrutinise my spending and assume I must have been planning to enter a trust deed? I am probably being very paranoid.

Many thanks

Welcome to the forum sarah95.

I guess that the starting point is that any creditor is free to choose whether or not to accept a trust deed.

Excessive spending soon before trying to set up a protected trust deed might cause concerns, for a trustee considering whether to take on a case as well as for creditors.

A key question is probably whether the money was spent in the belief that it could be repaid, or whether it was spent knowing that it could not be repaid?

Another key question is whether your spending would be considered to be excessive. Some people might take the view that the best part of £2000 on Christmas presents is quite a lot. Others might view excessive as being buying a car or an expensive luxurious holiday while being fully aware that the cash would never be repaid. It's a matter of opinion rather than being a black or white fact.

In general terms though your creditors are likely to take a commercial view on the situation first and foremost. Recent spending before setting up a trust deed is very common. Struggling to juggle repayments many people end up using credit to pay their mortgage, their bills, for food or for petrol for example. This often happens right up until a trust deed is signed and makes no difference to the outcome.

By a commercial view I mean that they consider the alternative, the fact that you might have no option other than to become bankrupt if a trust deed fails to become protected. Will they receive a better return on the money owed to them from a proposed trust deed or from bankruptcy? Theoretically at least a trust deed will usually be expected to work better for them commercially.

I certainly think that you have nothing to lose from speaking to an expert about your circumstances. The chances are that they'll have dealt with many similar scenarios in the past and will be able to offer you a credible view based upon their experience of how things are likely to work out for you. It may well turn out that your concerns aren't warranted.

Hi sarah95

TDA has pretty well summed it up. It is normal to fear the worst in these things, but things are very rarely how people imagine once all matters are reviewed. The key thing is always to look at the options and plan a clear way forward.

Mark

Hi sarah95,

It's positive that you have decided to look for advice in dealing with your financial difficulties as sometimes this can be the hardest step. Another positive thing is that there are solutions to help you deal with your financial difficulties.

Borrowing money or using credit just before you enter into a Trust Deed doesn't normally cause a problem so I wouldn't worry too much about that.

The best way to move things forward is to sit down with a couple of advisors from different firms and speak about what options you have. By speaking with a couple of advisors you will be able to get a feel for how a Trust Deed will work with that company and how comfortable you are with that advisor. After all, you are going to be dealing with that advisor for the next 4 years so you need to be comfortable and trust them.

The most important part is to ensure that you receive everything in writing with regards to how much you will pay per month, how long the Trust Deed will last for and what will happen with any assets that you may have.

If the time is taken at the start and a Trust Deed set up for the correct reasons they it can and does work in providing the debt relief and light at the end of the tunnel. I think the biggest difficulty is the fear of the unknown for people. A Trust Deed can be a really simple and straight forward process.

As others have said, this really shouldn't be a problem. it may be more of an issue if you were going bankrupt though sarah95, as it is the kind of thing that could result in you being made subject to a Bankruptcy Restriction Order - however these are not applicable in a protected trust deed.