Thanks for clarifying that David.

I was also wondering in TD I assume the monthly contribution is based on your income and expenditure and what you can reasonably afford to pay but is the contribution also based on the overall level of debt i.e. the higher the debt the more the contribution should be to be accepted by creditors?

That's correct. Creditors have a set criteria that Trust Deed proposals must try to meet in order that they will accept it. The higher the debt then the higher the contribution would need to be for a proposal to be accepted.

The payments per month are first of all worked out based on affordability. A good advisor will work through a thorough income and expenditure with you and from this if the payment per month is in line with what the creditors would accept then that's what is paid i.e. your surplus income. If in the event that the payment isn't enough then sometimes some adjustments and cutbacks to the expenditure can mean that the person can afford the payment per month.

If in the unlikely event a person is simply unable to afford the payment per month which the creditors would accept then it may be a case that they consider Sequestration. As this doesn't work to an acceptance criteria the creditors have no say over the payments per month.

As I said a good advisor will know exactly what creditors criteria is and can advise you on all of your options.

Hi blossom36.

Your question is very common and has been answered very well by David.

As a debt adviser I often speak with people that have been given backwards advice. The adviser (not a very good one - probably incentivised to sell trust deeds) has started with what is needed to make a trust deed work for the creditors and then tried to make the "income and expenditure" fit that purpose.

That's totally the wrong way around and will lead to problems later on very often.

The idea is to take a proper view of someone's circumstances and then establish which options are genuinely open to them. There is always a way to deal with the problem... by doing things the right way around you're much more likely to find the best one.

Hi TDA

It's a good point re meetings and especially advisors trying to get the figures/information to 'fit' a particular solution which benefits them more than it does the individual.

The guidance on these matters are quite clear and in particular the requirement to have a filenote/review of all matters discussed and for that review to be sent to the person to ensure this wholly represents everything discussed and agreed. It provides some comfort for the individual as well as the firm.

Mark

Thanks everyone for your response.

I guess it's a similar point to the one that you made earlier about fees Mark.

Firms starting (in terms of the disposable income) with what they need to get a trust deed past the creditors and then adjusting their fees to ensure the creditors get the very least dividend possible.

Backwards.

It's a pleasure blossom36.

Please keep asking away if you have further thoughts or questions.

It comes down to ethics at the end of the day - you can bet your bottom dollar that those firms out there that are manipulating the figures and working things backwards are more interested in what is in it for them rather than what is best for the client.

After struggling like this for years, I just want to find a solution that will work for us and give us our lives back. This forum has given me some hope at last to finding that solution and has made me know that I am not alone. There is so much shame associated with debt it is hard to speak to people about it which is probably why I have carried on for so long without seeking advice and have probably made my debt situation worse that it would have been if a I had sought advice earlier. My husband losing his job has made be realise we can't go on like this.

I think the first step of looking for help is the hardest. Hopefully you will find that it all gets easier as you go along. I'm sure there are plenty of others on here that will know exactly how you feel, blossom36, and will be happy to help you along the way with the benefit of their own experiences.

Thanks Kevin.

I wonder if I could just ask, with the level of debts that we have what sort of monthly contribution is likely to be required for a TD to be accepted? I totally understand that it is based on income and expenditure and therefore individual circumstances but just wondered if anyone could advise what an acceptable contribution is likely to be.

That would be individual to each of you blossom36.

How much debt do you each have individually?

If you have any joint debts include the full amount owed for each of you when you add up the totals.

Hi Blossom36,

As TDA has asked, if you can give us a breakdown of what debt you have in your name, what debt your husband has and then any joint debt, we can calculate what a minimum payment to creditors may be.

Different creditors have different acceptance criteria for Trust Deeds so these payments could vary and as you already know, it's all based on affordability and a thorough income and expenditure review.