Welcome to the trust deed forum meercsnus.

I'm sorry to hear that you are finding yourself in this tough position.

When you signed the trust deed it's clear that the bulk of the proposal was based on the equity in your home. Creditors accepted the trust deed becoming protected on this basis, and your appointed Trustee has an obligation to ensure that your creditors do benefit (one way or another) from the equity that is in the home in line with your trust deed.

I'm afraid that I don't think you'll find it possible to remortgage with your name on the mortgage (even if it's joint) while you remain in a trust deed. You may wish to check with a mortgage broker, but we're unaware of a lender prepared to offer additional lending to someone who is currently in a trust deed.

You are free to offer your Trustee £300-£400 per month in lieu of the equity. Given the time that it will take for the full amount to be paid over though I'm not sure your Trustee will feel able to accept the offer. As they will continue to charge fees for as long as the trust deed continues, and as the creditors will want to get their hands on some money soon, the trust deed firm may feel that a very extended delay is unfair on your creditors when there are other ways for the money to be produced sooner. Again though... you are free to make the offer to your Trustee if you are prepared to be in this situation for the long-haul (if it turned out to be acceptable).

Is there any reason in particular that you would see living in rented accomodation as being a backward step?
Is it a backward step compared to fighting with your Trustee (who would very likely win in the end) or paying all of your spare cash over every month for years and years?

The problem with bankruptcy is that if you have spare cash you'll be expected to pay it over for three years (like a trust deed). If you decide that leaving your home is inevitable, I'd think selling it yourself (or by working with your Trustee on the sale) would be preferably to bankruptcy?

Sorry that I haven't been able to offer ideas on other options that might help you. Facing up to a situation where a home you love is at threat must be horrible. However I hope that the information provided in some way helps you to think through the best route for you to take from here.

Have you looked into the Scottish Government's mortgage-to-rent option meercsnus? May not be available to you, depending on the value of your home etc but may be worth a look if only to rule it out.

Hi Kevin, I've not looked into that but I will now - thank you 🙂 Rob

And my sincere thanks to the TDA above for your time taken to reply my post. Its been really helpful in understanding the situation.

I've a question now about going forward. I'm now fairly (and sadly) convinced that I'll have to loose my home, so I'm now wondering what my best options are going forward.

To complicate matters further I've just spoken to HMRC about my (currently) outstanding tax, for which I've been on a repayment plan. When I submit this years tax return they tell me that my current repayment agreement will be cancelled and all outstanding tax will be due in full. There is no way I can cover that and they are highly unlikely to accept a new payment agreement.

So.. I understand that if I sell my home with the trustee then I'll clear my TD and be back on track to rebuilding my credit rating. However my TD is saying that I have to release 100% of the equity back to the TD, so I'm not going to be left with anything to help relocate, cover the lost time off work, deposit on a rental property or to repay that HMRC debt.

So my question - how bad an idea is it for me to go bankrupt at this point?

I feel my situation is becoming hopeless. I'm still earning at the moment and I understand the process will take a few months before the house is repossessed. I know this is unethical, but could I simply stop paying my mortgage, overdue tax and other HMRC debts, putting those funds "aside" over the next few months to help me relocate and get started again? I'm wondering if the bankruptcy process means and investigation into my finances will be done and someone will see I've put that money aside?

I imagine you're already annoyed I'm even asking that but, I'm being serious about weighing up my options. Another daft question, and I know this sounds silly but does bankruptcy mean I loose things like, say, my dvd player or patio furniture?

Hi meercsnus.

Bankruptcy isn't an option at the current time. That's because you remain in the protected trust deed.

Once you are discharged from the trust deed you may wish to evaluate your position in terms of your tax liability.

Do you want for your home to be repossessed? Would it be better all around to work with your trust deed firm for the home to be sold in a more organised fashion?

Have you discussed the wider situation regarding your tax liability with your Trustee? There's nothing to be lost by asking them about this and seeing whether they can help in any way alongside dealing with the equity in your home. That's quite a complex matter; you may wish to write to your Trustee personally rather than dealing with frontline staff on the phone.

If you become bankrupt in the future, money you have saved would be an asset which you would have to pay over. For that reason, sorting out your new housing arrangements first would seem to be the best way forwards.

You would not lose basic household items such as those you mention if you became bankrupt, though many myths about this do the rounds.

Hello - Again. Thank you for taking the time to give me clear and straight forward advice. Its REALLY appreciated.

As trust deed assistant says, talk to your trustee again meercsnus. If you tell them that you are happy to fully cooperate in selling the house in return for them allowing you to retain enough of the proceeds to get a deposit down on a new tenancy and cover your moving costs then I don't see why this shouldn't be possible. Your creditors are getting a much better dividend than expected anyway and it removes the need for your trustee to enforce a sale through expensive legal action. I imagine that they wouldn't allow any more than is necessary for that though, so the tax debts may have to be dealt with another way though is worth asking.
The majority of household goods are exempt when it comes to bankruptcy, including garden furniture I believe. I don't think dvd players are specifically mentioned as being exempt but realistically no trustee would be looking to take that kind of thing given its low value.