Welcome to Trust-Deed.co.uk Smiler. It sounds like your partner is very lucky to have such a supportive and helpful other half.

Lots of trust deed firms (including the four represented here by Mark, Kevin, Shona and Chris) will be happy to conduct a valuation before the start and effectively fix the position at that date so that you have some certainty. They can also give you written confirmation about the situation.

This means if there is equity you can weigh up whether a trust deed remains suitable. It also means that if there is no equity there should be no problem as a result of a revaluation later.

The £500 charge you mention is certainly legitimate, but there are plenty of firms that don't charge it (again including the four firms we feature on the site). It's therefore not really clear why anyone would choose to pay it (in my opinion anyway).

You're absolutely right to seek complete clarity on the situation with your home before anything goes ahead. Problems with equity in homes has been the number one source of awful problems that people have discussed here over the years. There are however firms that will give you this clarity in advance so that you know where you stand and can make decisions accordingly.

I hope this is useful information to start off with but please fire away if you have more questions.

Thank you for the welcome.
I am grateful for the compliment, though the reasons why my partner ran up the debt were silly but not selfish.
Would the valuation of our property now be the valuation dealt with at the end of a trust deed and if so what happens if the market picks up. Also,how will my credit record- which is unblemished- be affected. I will need a new car very soon as the current one is virtually on its last legs. Finally-for now - as mortgage rates can only go up, will this be factored in to any monthly figure as we are on a variable rate and any fixed or tracker would mean a higher monthly outgoing. Probably lots more to come from me but I am very grateful[:)]

Hi smiler

There are a thousand reasons things happen. I think you should certainly clarify the equity position and certainly not pay £500 for not having equity. I'm amazed than an ip has advised you may have equity or perhaps you haven't. In all case this needs to be agreed before you do anything. In all cases we & many other firms confirm this before doing anything. Please make sure this is confirmed in writing before doing anything.

It should have no effect on your credit record. I can guess it was a shock, but please see this as a way forward. If there is a clear path, the it will deal with the issues, but safeguard the house.

Mark

Hi Smiler

Just saw your post heading. Making sense of it should be sitting with an ip firm direct, discussing all options and ensuring it is all confirmed in writing re values, time, contribution etc before you do anything.

Mark

Thank you.
How do I go about clarifying the Equity issue. I don't want to name who I have spoken to but it isn't a come day go day straight off the internet firm. Problem is I dont know what to think and how much extra all this will cost. The costs of my partners debts are increasing as I type and we need to move on this fast.
However the whole idea of a trust deed for whatever reason scares me-almost as much as the debt!

Hi Smiler

Most decent firms will confirm the equity position, so that it is absolutely clear. Never under any circumstances proceed unless this is confirmed.

Mark

Mark
You mentioned that my partner entering a Trust Deed should not affect my credit position. Are there any circumstances where it might?

Hi Smiler

Generally, no unless there is a joint debt.

Mark

Hi Smiler.

Your credit record might be affected if there were joint accounts that weren't repaid. Each of you is financially fully responsible for these as individuals as well as together.

If your joint account has an overdraft you'll want to take care of this before the trust deed starts.

As you have that joint account, and presumably a joint mortgage (?), your credit files are likely to be linked.

This link means that if you apply for credit a lender could follow the link and find that your partner is in a trust deed (or just in a lot of debt as things stand). This might affect the willingness of some lenders to lend to you.

It doesn't affect your credit rating though... these are individual things.

There need be no extra cost associated with getting valuations etc done before a trust deed starts. Plenty of firms will be happy to handle this without charge (or that £500 later being payable). This isn't in any way to suggest that the firm you're talking to are in any way disreputable (I'm sure that they're not), it's just that firms vary a little in the way that the work and the charges that they impose.

The method of handling your home that I outlined in my earlier post (with a firm that works this way) should keep everything straight and safe for you. Handling it this way there will not be another valuation later (unless something goes very wrong leading to the trust deed failing). The position with equity is fixed at the start, which it isn't always it seems with all firms. Prior written confirmations can be provided so that there cannot be any nasty surprises later.

Trust deed payments are based upon affordability. If interest rates increase there will need to be a consequent reduction in the monthly trust deed payment.

Thanks TDA. That does reassure me greatly. yes we do have a joint mortgage as well as the joint account. Would it be sensible or silly to change the mortgage to my name only or would that be impossible or too costly given the circumstances? Also would any reduction in trust deed payments due to increased mortgage payments prolong the agreement. None of the debts are joint. i have my own CC and loans which I am paying and can afford.
Again thanks .

Thanks Mark. We have no joint borrowings apart from our mortgage which is not and never has been in arrears.Nor is there any other borrowing against the property.

Hi Smiler.

I'm not sure that would be a necessary step, but it is a question you could put to your existing lender or a mortgage broker in terms of a new mortgage.

Your existing lender may not welcome the loss of security (one person rather than two responsible for payment). The lack of equity/deposit may put off a new lender.

Not all lenders will follow links on credit files anyhow. Each has their own way of making lending decisions.

Sorry... your second question!

Discuss the subject of extensions with any trust deed firm you're considering using. Many will exercise some flexibility where a reduction in payment capacity occurs for reasons that are out of your control.

It is inevitable that an individual's income and outgoings will change over the course of a trust deed. Such changes should be accounted for as the trust deed proceeds and contributions amended accordingly. The trustee may request that extra payments are made in order that creditors are not disadvantaged by these changes - however they also might not require this. You will find practice varies, which is why it is a good idea to speak to more than one insolvency firm before choosing which to go with.

I have a feeling that your credit files will already be linked, so am not sure that changing the mortgage into sole names will make much difference. However, whilst I couldn't say for sure, I doubt that this link will cause you any significant problems.