Hi pipsaholic,

Under a Trust Deed a payment cannot be taken from social security benefits. If someone's income is solely made up of benefits then a Trust Deed isn't something which would be suitable.

Your parents are not required to provide their bank statements or income.

Are you already in a Trust Deed or are you looking at options to deal with any debts that you may have?

Welcome to the forum, pipsaholic.

As David says, a Trustee under a protected Trust deed cannot ask for a contribution from any benefit income. This includes the benefits you mention as well as any other type of social security benefit or tax credit.

Having said that, if you also have another source of income - for example you may be working and receiving some top-up benefits - then the benefit income is taken into account when working out what you are able to afford to contribute from your earned income.

On the subject of parents, David is certainly correct when he says that your parents are not required to provide their bank statements or details of their income. However, under the new legislation applicable since 1 April this year, a money adviser or insolvency practitioner is required to ask for details of your whole household's income and outgoings. So if you are a single person living with your parents you may well be asked about their circumstances too.

It is really just to check that whatever you may be paying in towards the household is reasonable and proportionate. In practical terms though, if you are unable or unwilling to provide such information then it does not stop you from setting up a protected trust deed.

What if your self employed and making a loss I guess you require to be registered self employed by HMRC?

Hi,

I'd think a trustee would want to verify income.

They'd look at accounts, tax returns, bank accounts, forecasts etc.

Do any of you feel it would be more sensible to avoid bankruptcy to get employment then go onto a trust deed that way you would qualify for one and make minimum repayments and whatever your financial situation is in 4 years time positive or negative it will come to an end? I am deciding on a payplan or trust deed, however I have recovered from mental health issues looking to get back into work.

Hello pipsaholic.

I'm glad to hear that you're experiencing a recovery from medical challenges.

Bankruptcy/sequestration can be a very appropriate way for some people to address a debt problem.

It sounds like it's an option you're keen to avoid (as are many others), do you mind if I ask why?

won't be able to get a selection of jobs, refusal of mortgage, higher home/car insurance premiums need to get specialist insurance for people with bad credit.

It really would be useful to understand the type of work you do - employment issues may apply to different types of debt solutions (not just bankruptcy) but aren't applicable to most people.

Getting insurance shouldn't be an insurmountable problem, though anyone in any type of personal insolvency (including trust deeds) should openly disclose this status and check regarding policy exclusions.

Hi pipsaholic,

A Trust Deed can be viewed by some organisations as a little better than a Bankruptcy but ultimately both are Insolvency.

With a Trust Deed you need to be confident that you can maintain the payments for the duration of the 4 years. If you don't then the Trust Deed will fail.

Sequestration on the other hand you pay when you can and if there is a change in circumstances you stop paying but the Sequestration still continues and completes.

As you are currently unemployed at the moment you could enter Sequestration and if you remained unemployed for the next 12 months you would be discharged from the Sequestration, debt free and having not had to make any monthly payments.

The best thing to do is speak with an advisor, compare the pros and cons of a Trust Dedd, Sequestration and a DAS and then decide which is the best option that suits you.