If your TD payments have more than doubled as a result of you discussing this situation with your trustee then it would seem they have this in hand and have included the shortfall in your TD. I'm in a similar situation as I gave up my house because it was in negative equity although this was the plan from the outset of the TD and the IP was well aware of it in the figures at the outset.

Keep on at your trustee and get something in writing to confirm that Northern Rock is a creditor included in your TD

Thanks Upstream,

Northern Rock were part of the original agreement as part of the mortgage was unsecured and had been captured in the TD from the beginning so I can only hope they are now just making a bigger contribution to them.

I'll keep on asking the question, but fingers crossed!

Hi CG

The shortfall will become an undecured claim in the Trust Deed and shouldn't alter the ending of the Trust Deed once the final payment is made.

Mark

Ok thanks Mark,

I think I am just worried because things are never that simple when it comes to my relationship with money! MaybE things are just looking up for me!

Hi cg

I'm sure it will be fine. NRAM are particularly good to deal with on the Trust deed front, so there should be no issues.

Mark

NRAM don't really have any choice, cgbaillie, it is the law that the debt to them will discharge alongside all of the others.

This is great news that NRAM are good on the TD front.

Thanks both, I feel a bit more settled after reading this. I have read a few horror stories about people not being discharged etc so getting myself in a bit of a knot!

Hi cgbaillie,

I would try not to stress too much about the horror stories. Thousands of people enter into Trust Deed and successfully complete them each year without any problems. It's unfortunately when problems arise that we tend to hear about them on the forum.

Your post will be particularly useful for another poster on the forum who is considering handing the keys back to her mortgage company and allowing the property to be repossessed.

Hi CG. I'm in a similar situation & considering surrender of my property. I am interested in your comments about how your monthly payment doubled as a result of surrendering your property. Why did this happen? I thought the monthly payment was a direct relation between income & expenditure, not relating to the size of the debt?

I'm also interested in why bankruptcy would even be considered as an option here? My understanding is that the shortfalls would fall into the Trust Deed pot, so I can't see where the relevance to bankruptcy comes in?

thanks

Hi thinkingofthefuture,

Due to the size of the shortfall (around £33,000) this increased my debt by more than half. If I could have sacrificed anything else from my monthly outgoings, I would have had to, what I am now paying is the maximum my trustee could take from me. I no longer had a mortgage or related bills to pay,(moved into my parents and am paying digs, but not as much as the house swallowed up!) therefore I had a big chunk of extra income which needed to be accounted for, and against the new debt level. More money and more debt meant this was the price I had to pay! A price I am happy with because the stress of it all is now gone, and as soon as I did it it felt like someone had taken a weight off my shoulders. I was lucky to be in a position to be able to do that, not everyone is.

Because of the shortfall the debt level had then risen to £50k, which meant bankruptcy could have been an option to allow me to pay a smaller amount each month, however would have probably meant starting from square one, and paying the 3 or 4 years again, so instead I decided just to take the offer of a doubled payment for another 18 months. The Trustee didn't think it was the best option, but wanted to give me all the options I had and make a judgement on my circumstances at the time.

Hope this makes sense?

Hi CG. Thanks. That's helpful. I am a bit confused about the difference in contributions though. I thought that the contribution you make is based entirely on affordability & that's regardless of whether you are in a TD or Bankruptcy situation.

I am already paying the most I can afford into my TD and the thought that I would have to pay in more or face bankruptcy as a result of surrendering my property is starting to scare me off.

I could understand a contribution increasing if, as you say, you had less bills as a result of surrendering the property. However, if the total outgoings were to remain the same then would I have to go Bankrupt in order to keep the same payments each month and include Mortgage shortfall monies in my list of creditors?

thanks again

The contribution is always based in net free income affordability. In this case, the requirement to pay the monthly mortgage and associated costs was removed, increasing the net free income. That is why the contributions would have been increased. I am unsure why the term was also increased, to safeguard the level of the originally proposed dividend forecast I would imagine?

Hi Sorry for the delay! The term was not increased, it stayed the same. I was only offered bankruptcy as an option to perhaps reduce the monthly payment. But I decided not to take the risk. I would suggest talking it over with your trustee. They should be able to give you more information on what would happen if there is a shortfall.