Hi lgirva10 and welcome.

Trust deeds can be a confusing subject; please feel free to ask as many questions as you'd like.

The £500 to "protect the equity" in a home is certainly one subject that causes much confusion.

The real question for you, when deciding whether or not this is an issue, is whether there is any equity in your home now.

If there is equity, you will need to contribute your share of it as part of any trust deed. No payment of £500 will prevent that.

If there is no equity (or negative equity) at the start of a trust deed, some trust deed companies will offer to protect the equity in return for the payment of a £500 sum. This basically means the property will not be revalued later, when equity might have developed had house values increased.

To add to the confusion, some trust deed companies (including those represented here by Mark, Kevin and Julie) will do exactly the same thing without asking for a £500 payment.

So basically there's no point in ever paying that £500 unless you're determined for some reason to use a particular trust deed provider that insists upon it.

The subject of the value of the property is interesting. A trust deed valuation is based upon it being sold pretty quickly. It tends therefore to be lower than some estate agents might suggest. As such many people find that there is little or no equity in their property anyway.

As your property is jointly owned any equity taken into account in a trust deed (if there is any) would only apply to your 50% share of it.

Hi Laura

NO, NO, NO, NO. If I'm being honest I am sick to death of these sales people, where commission comes before integrity or decent eh! decent/truthful advice. Advertise on the radio and to ensure all the calls are dealt with, hire a call centre with no experience. Not exactly the best way to plan your future.

These companies advertise on TV/ Radio for a reason!

Your equity, as you/they state, will not be safe for this rediculous, historical based on nothing £500 payment.

Deal directly with the IP. Ensure the value/ mortgage/equity is clarified IN WRITING before doing anything and please don't listen to false commission based promises from anyone on the phone.

Mark

thanks for the quick reply!

as far as i was aware it was a ip that i was dealing with (carrington dean, office based in buchannan st, glasgow) have you heard of this company!

the girl told me that if i paid the £500 over the 1st year this would protect my property. i also have 2 card in my name 03 plate fiat punto and x reg peugeot 206 was also told these will also be secure as they are less than £3500.

with regards to the equity in my property what are my options to be free of this debt nighmare!!! i feel a trust deed is too good to be true.

thanks

Hi lgirva10

The car maximum in Trust Deeds is £3k not £3500 and the position re the £500 is wrong. So in terms of advice, 0 out of 2 so far.

Your car looks fine. Re the property, it will be valued and half of any equity will require to be paid irrespective if you stay there or not. Worst case scenario if it's not paid, the Trustee could raise an action of Division and Sale and force the sale of the property.

Mark

Hi lgirva10

As Mark states please make sure that you have everything in writing before you sign any paperwork, particularly in relation to your house. Once you have signed there is no going back!

Julie

Carrington Dean aren't a middleman company and can set up trust deeds themselves. The house is not necessarily going to be a problem, as long as the value of your share of the equity is fairly small, but as Mark says the equity has to be calculated and a valuation made by a surveyor. Until this is done then I cannot see how they can guarantee anything with a £500 payment.

so for example say if i had £10000 equity in my property i would have to raise £5000 and pay over the 3 years and still be able to keep my property.

all this would be agreed before signing anything is this correct - im scared to enter into something to find i have been mislead as i read most of these commpanys take most of the repayments for fees and creditors get a small proportion of repayments.

thanks

Hi lgirva10

The position with the equity is correct. It is very important that you have this clarified and confirmed in writing before doing anything.

It is also wrong to think most firms swallow up the contributions in fees. We outline the dividend at the start of a case to creditors and ensure this is the amount paid at the end. I am sure the majority of IP firms do the same.

Mark

thanks very much this has cleared a lot of things up. really love the honest advise that you are giving me. the girl i spoke to just was tellin me everythin would be ok with my house never mentioned anything about the equity part affecting this.

sorry for so many questions just want to be certain before i enter into anything!!!

i am seperated from my partner and he lives in the house we own.

my ex partner is also looking to enter into a trust deed he probably has about £15,000 in unsecured debt too.

my debts are £15000. with say £10,000 equity in our house.

in your opinion what do u think is the best option for us. do u think a trust deed would be suitable or do u think a debt management plan would be best?

thanks

Hi lgirva

The Debt Arrangement Scheme would protect any equity in your property, however you have to pay all your debts in full, so it really depends how much you could pay every month to your creditors as to whether this solution would work for you or not.

Do you have any idea how much you could you realistically afford to pay towards your debts every month i.e. your monthly income less your month expenditure (excluding any payments towards your creditors).

In addition I would point out that if you decided to go down the Trust Deed route and there was equity in your property it would have to be a third party that paid the equity and not yourself, if you wished this to be paid over the course of the three years.

Julie

...or the equity could be paid yourself, but it would have to be by way of extra payments at the end of the 3-year period.

It is usually possible to make an allowance for part of the equity in order to make a trust deed viable. The basis for this is that if you were selling the property there would probably be a few thousand pounds of fees etc incurred, therefore the realisable equity can justifiably be said to be a bit less than the actual figure. So in your calulations above, if there is £10k joint equity you may only need to pay in say £3k for your share, and creditors do accept this. I can't speak for other firms, however, as different insolvency practitioners deal with this issue in slightly different ways.