Hi Steve,

If it doesn't get protected your trustee will have to look at other options including sequestration. Protected just means the majority share of your creditors have agreed to the proposed settlement and will write off the rest of debt, usually this will be a minimum of 10 pence in the pound. A creditor might not agree to the trust deed if they feel they could get more of their money back another way.

If it does get protected every 6 months your trustee will ask for proof of your income and a breakdowm of your outgoings, mine has never asked for bank statements etc so your proposal of working with cash after the direct debits etc were paid would be fine.

As for equity some companies ask for a £500 payment from a third party to disregard any equity that might exist by the end of the trust deed.

If you manage to make all your payments, full agreed amounts and on time I see no reason for the trust deed to become longer than expected or accrue additional costs, of course if you had equity or your income had risen during the period this may be different.

Hi Steve1984

All good IP firms know the criteria to gain creditors acceptance, so there should be no surprises.

As I always say, get everything confirmed exactly in writing and you should be ok. Never accept 'it might', ' it could' etc Ensure your IP is definite in all matters, particularly with equity, contributions, overtime/bonuses etc.

Mark

Thanks for the answers so far.....

can anyone answer points 1+2 specifically though as it is these aspects I cant quite get clear.

1)What happens if it is not protected? Do I need to keep paying the trust deed for 3 years even though it is not going to work out as planned? And in this case do I also need to pay the company who rejected it, so paying more each month than before signing the trust deed. (if that makes sense)

2)and, can they reject it on the basis that they think the monthly payment is too low and then come back and say it has to be increased by £150 per month for example?

thanks again

steve

Hi Steve

In answer to your questions, the trustee would look at sequestration most likely if it did not become protected.

It would be difficult to go back with another offer as the Trustee should be seeking the best offer at the 1st stage.

Mark

If the trust deed doe not become protected then you have various options available. You could apply for sequestration instead, you could apply for a DAS programme, or you could continue with your trust deed, albeit unprotected.

The last of these three is quite uncommon really as non-consenting creditors are not bound by the trust deed and can therefore still take action against you if they wish and do not have to write any debt off at its conclusion.

It is possible that creditors may feel that your trustee has been too generous in assessing your living expenses, n which case they could reject the proposals unless the offer is improved. However, a good insolvency practitioner should know what is acceptable to the vast majority of creditors in this regard.

thanks for that. Just thought of the other question i had.

I have a halifax bank account which has all my direct debits etc set up in and my wage paid in. It has an overdraft facility of £3000 but i have managed to avoid using this as i didnt want any more debt to deal with. as such this account is not involved in my trust deed that i have just signed. I asked the person who organised it for me these questions but they couldnt give me a definitive answer so im just looking for anyones opinion / past experience.

-Will the halifax be made aware that i have signed a trust deed if they are not involved in it and if so how?

-will they close my account because it has an overdraft facility? or cancel the overdraft?

-would i get any notice of this so that i can move the DDs and wage etc to another account i have that has no overdraft etc ?

I dont care about losing the overdraft facility, its just the hassle of switching all the bills and my wages etc so i'm hoping because it is not involved in the trust deed that the account will just be left.

Also, I have been clearing out my drawer and found a credit card that I had cleared 2 years ago using a balance transfer to another card for 0%. As above i didnt start re-using it again as i was trying my best to avoid getting more debt. I just forgot to cancel it after the balance transfer. It has a zero balance now so obviously is not involved in the trust deed. Should I have declared this before signing the trust deed or is it irrelevant? I dont want them to think I hadnt told them about it so I can start using it, I genuinely forgot I had it as I havent used it for 2 or 3 years. Is it allowable to use this in times of emergency during the 36 months of the trust deed? I was going to cut it up but I just wonder what you would do during the 36 months if the boiler packs in of the car needs £XXX repairs etc. I hope not to have to find out but i suppose it is just the thought of having nothing to fall back on in emegencies is a bit scary. Especially the car scenario as I need it for work and being in trust deed i dont suppose i'll be able to head down to arnold clark and get a new one on finance! So I am thinking the worst in that if i have no money to repair the car, I can't get to work, and then can't pay the trust deed and so on.

thanks

steve

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Hi Steve.

There is no definitive answer to your question on the bank account.

Banks can become aware of trust deeds, for example by monitoring the Edinburgh Gazette. An account with an overdraft facility might not be something they consider you to be eligible for any longer, so there is some risk that the account could be closed or the overdraft withdrawn without notice.
Maybe it would be a good idea to open a new account as a back-up?

You can keep, and even use, a credit card that had a zero balance at the time you signed your trust deed. Remember that no allowance will be made at any point for you to repay new debts, so by definition using it is pretty risky in terms of being able to repay it.