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Scottish Trust Deed Forum
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Topic starter
24/01/2019 10:46 am
Hi there. I am new to this board but looking for some advice.
I have now been in a trust deed for just over 2 years. During 2018, I suffered some financial hardships which led me to use payday loans. I have been managing to pay these along with my trust deed payment monthly. The payday loans are due to be cleared end of January, end of March and end of May. So come summer time, these will be clear and I will only have the trust deed payment to make.
My annual review has just been completed and I have been advised that I have gone against trust deed terms and conditions by taking out further debts. I feel so silly and I am really concerned and upset about it all. Don't really know what to do #128532;. Prior to taking the payday loans, I had read that there were no real 'rules' to taking further debt whilst in a trust deed, however that these would not be given consideration in my income and expenditure and therefore could cause financial difficulties when making the repayments (I fully understand this and I am managing to meet the repayments). I read that there are only legalities against taking on further debts (ie payday loan) when bankrupt.
I would be really grateful if someone was able to offer some information on my situation.
Thank you.
24/01/2019 10:52 am
Hi Rachael6868 and welcome.
We've heard here numerous times that there is no general rule against borrowing while in a trust deed. This is different to bankruptcy where a general rule is applied.
What we don't know is whether your trust deed includes any provisions in this respect that are particular to the firm that you're using.
Maybe you should ask your provider to point out which specific terms and conditions that you have breached?
Qualified Debt Adviser & Forum Administrator - Ask me anything about Trust Deeds 
24/01/2019 12:49 pm
Rules or not, surely this means that if you have enough disposable income to pay loans as well as your TD then your allowances are set too high or have undeclared income? I can imagine your IP would want to look into this further
24/01/2019 1:10 pm
Hi naedosh,
It's really up to people to decide how to use their discretionary allowances. Cutting back on something to pay for something else is a matter of individual choice to some extent.
That side of things may or may not be of concern to a trustee based upon the particular facts of a case.
We do of course know that a trustee will not making any additional allowance for the repayment of new debts, which makes further borrowing risky.
Qualified Debt Adviser & Forum Administrator - Ask me anything about Trust Deeds
25/01/2019 1:22 pm
There is no law against taking further debt whilst in a Trust Deed, but taking out and then paying off new debts could certainly be seen as breaking the terms of your agreement. At the end of the day you are paying interest with money that could have been paid towards your debts.
I would have thought it is something that shouldn't cause a major problem though. What action is your trustee saying they intend to take because of this, Rachael6868?
Scottish Debt Solutions Expert - Ask me for help setting up a Scottish Trust Deed or Debt Arrangement Scheme plan.
