The Trustee's fees and outlays are not added to the debts as such.

In terms of the Trust Deed you agree a contribution which is paid into a Trust Account for the benefit of creditors. The Trustee will report to creditors proposing the Trust Deed and within that proposal there will be a figure for fees to be taken over the period of the Trust Deed. This will normally agreed by creditors and deducted from the contributions made. Fees or outlays are not something ove and above the contribution amount.

Both will affect your credit score the same as both are 6 years from the start, not the end.

Mark

Hi again pipsaholic.

As Mark has explained, fees aren't added to the debts of the vast majority of people who sign trust deeds.

Think of the money you can afford to pay into a trust deed as being a single pot. The firm handling the arrangement takes their fees from the pot, the rest goes to your creditors.

From income (and sometimes assets) you're simply expected to pay what's deemed affordable.

I don't think there's a great deal of difference in terms of future access to credit between trust deeds and sequestration.

In terms of employment - it depends what you do. For most people this is a non- issue, but there are exceptions.

What line of work are you in?

Will i be able to take out a mortgage or credit card or pass a credit check for gaining employment whilst being on a trust deed?

forgot to mention you mean your credit rating gets lowered from day 1 of the trust deed and improves as the 4-6 years your on it until cleared?

Hi pipsaholic.

It really would be inappropriate to take out further credit while in a trust deed, even if it isn't specifically forbidden. No allowance will be made to enable you to afford the repayments. You may find it impossible to get that credit anyway.

Your chances of getting a mortgage during a trust deed will be extremely low, and it will remain challenging for some time afterwards. Having said that, if you cannot afford to keep up with your current credit commitments this may well already be the case.

You won't really have the ability to improve your access to credit until you have been discharged. Even then, the trust deed is likely to remain on your credit file for a couple of further years.

What type of work do you do?

Have people on a trust deed received a mortgage? There are loads of companies that deal with people on low income/bad credit that have gained a mortgage and decent rates. So, do you get discharged after 4 or 6 years I am confused?

Hi again pipsaholic.

Unless the mortgage market changes from its current acceptance criteria, you're almost 100% certainly not going to get a mortgage until after your discharge.

Discharge from a trust deed is after a minimum of four years.

The trust deed is on your credit file for six years from the start.

Hi pipsaholic,

I'd support what TDA has advised regarding securing a mortgage whilst in a Trust Deed. I can't see any lender prepared to give you a mortgage whist you are still in a TD.

The only lender I know that will consider lending a mortgage for someone who has been discharged for a minimum of 1 year from their successfully completed Trust Deed is Glasgow Credit Union. They will lend to someone living or working in a G postcode but you also need to meet all their lending criteria regarding deposit and affordability.

I was approved by The Nationwide after only 2 years discharge, are you sure there aren't more lenders out there that will consider it after 1?

We're none of us mortgage brokers tinsoldier.

You may well be right that there are more - and of course such acceptance criteria will change from time to time at every firm.

Always best to go to a mortgage broker and hear what they have to say - they typically have sourcing software than can compare most or all of the market at that point in time.

would that be the same for a shared ownership schemes?

It would pipsaholic - but there will be a more restricted panel of lenders and products available for a shared ownership purchase.

When it comes to obtaining a mortgage whilst still subject to a Trust Deed or Sequestration I always think of it on the basis that your asking the lender to give you anywhere between £50,000 and £100,000 which is a large amount of money even if it is secured against an asset. When a lender looks at your situation and see's that you've had difficulties in the past paying back a debt much smaller and have had to enter a TD or SEQ to try and clear this than this it will make them nervous about lending to you. Once you have successfully completed a Trust Deed or Sequestration then I think lenders attitude towards that starts to relax a little and they will consider lending to you.

I think it's about sufficient time passing before a lender will consider you for a mortgage after your Trust Deed or Sequestration.

The other thing to consider is if you want to buy a house whilst you are in a Trust Deed it will be extremely difficult, probably impossible to save a suitable deposit as all of your available surplus income should be going towards the Trust Deed payment per month.

I would suggest the best thing to do is clear your unsecured credit by way of a Trust Deed or Sequestration then start saving hard for a deposit to buy a house and after a couple of years you should be able to.

As TDA has advised in a previous post, we aren't mortgage advisors and it's best to speak with an expert in this field for accurate and reliable advice. I'm only telling you what I think the market is like.

Would a debt management plan or debt arrangement scheme be more suited towards lower monthly payments and a write off remaining balance if you don't win the lottery. Do these look better if you want a mortgage and loan while your on this scheme 4-6 years is a very long time without credit.