Hi pipsaholic,

Are you considering taking on credit whilst in a Trust Deed?

There isn't anything that prevents you taking on further credit but the question would be how could you afford to pay this back whilst in a Trust Deed. All of your disposable income is what should be paid to the Trust Deed and it doesn't really leave room to pay debts which have been endured after the start of the Trust Deed.

You would find it difficult, almost impossible to secure a mortgage whilst in a Trust Deed. You may be able to secure a loan, credit card etc whilst in a TD but the interest rates may be very high.

Taking credit out durin a trust deed is possible but not advised.

Hi, well circumstances change you find work and your pay increases and your bonus increases and new companies are opening up taking on people with low credit scores. There are specialist mortgage companies that take on people with bad credit ever more know since the 2008 crash.

I really can't see anyone giving a mortgage to someone in a trust deed. I had to be discharged for 2 years before I got mine in 2013.

Try by all means of course!

I thought that increased income had to be declared and your contributions probably increased accordingly.

If it was possible for you to get a loan and you did not consult with your Trustee first about your change in circumstances, how do you think they might view that and respond? You might end up in greater financial difficulty.

If you desperately need something perhaps discuss with your Trustee before you go further to see if you can get the funds.

I appreciate your posts do not actually say you are going to do this and of course it may be a hypothetical question.

Good post Firewalker.

It's really for emergencies like if your car breaks down, or boiler goes? So, would TDS be understanding and accept that.I think i read somewhere that you can borrow up to £500 credit whilst on a trust deed is that true?

Thx.

You can borrow money pipsaholic, but it's almost certainly a really bad idea.

No allowance will be made to cover the repayments; your disposable income (including your increased disposable income) will usually have to be paid into your trust deed meaning that anything but the very smallest of repayments is likely to be unaffordable.

If your income has increased please be sure your trustee is aware to avoid future shocks. If you experience a bit of a financial emergency please also let your trustee know; they may grant you a payment break to help out for example.

I would advise against taking out further credit whilst in a Trust Deed as it can lead to problems.

Speak with your Trustee if you are struggling or there is an unexpected bill. I've given payment breaks plenty of times to clients who have a valid and genuine reason. The last thing I want is for one of my clients to fall back into the debt trap.