Hello missk88.

Your ex is possibly irrelevant here, you should have been advised on your own circumstances only.

If you could not afford to pay your debts, including a joint debt, a trust deed does seem like one of the options that might be put forward.

You indicated on a previous post that you might have new debts. Are you being chased for new debts that didn't exist when you signed your trust deed?

What is it that you would like to happen in terms of your trust deed right now?

At the end of the trust deed one of my creditors of £6,000 will have totally disappeared so in total myself and my children's father are paying £15,000 to a debt of £9,000. Or I am paying £9,000 to a debt of £3,000. I may have been niave but I believe I have been given very poor advice motivate at making money from me by my insolvency company.

I was originally informed that my tax credits overpayment would be included and it was only when tax credits informed me that it wasn't that I am now having to make arrangements to pay that back. I was also told that when my trust deed was in the Edinburgh Gazette that if any 'new' debts (old debts that I couldn't remember) can forward after this then they would be told "tough! You had your chance to come forward!" The creditors are saying that this is no way the case and Knightsbridge can't give me a straight answer.

I feel like I should not have been given advice by the insolvency company that a trust deed was my best option. How can paying more back be benificial? I know it's too late to cancel but maybe I should just let them sequestrate me...would this only mean a year of paying 'what I can afford?'

Hello missk88.

When you signed your trust deed you committed to paying what you could afford towards the debts.

In some (not very common) circumstances that can involves repaying the debts in full, paying some interest on the debts as well, and paying the trust deed fees. This is why it is possible that you'll repay more than the original debt total.

Tax credit overpayments aren't covered normally and you should have been told this. Overclaiming is viewed to some extent as being fraud which is why this is the case.

Other debts that existed when you signed the trust deed are included. That's why the advertisement went in the Edinburgh Gazette... to alert other creditors. They can claim that this isn't the case but it makes no difference to you... they are covered by the trust deed (unless they are also debts that for some reason like the tax credit overpayments aren't covered by trust deeds).

If you enter sequestration (bankruptcy) you'll have to pay what you can afford for three years. Effectively the clock will start again.

Could you afford to pay your debts in line with the contractual repayments agreements when you signed your trust deed?

Were any alternatives to trust deeds mentioned to you?

Hi missk88 - I can certainly understand why you feel the way you do. The fact that your proposals are based on a four-year period and on paying back more than you owed in the first place is worrying. Maybe I am missing something here and there are other salient facts, but why was a trust deed even necessary in this case? Surely a DAS would have been more suitable?

Whilst trust deed assistant is right that you should be advised on your own circumstances only, your ex-partner is certainly not irrelevant in this equation. If he was making repayments towards this joint debt then the majority of the debt is being repaid and you would have a much lower amount to contend with. In these circumstances I find it hard to see how a trust deed would have been the most suitable option.

Tax credits overpayments can usually be included in a trust deed - it is very common to do so (though is easier if you are no longer claiming any tax credits - they may seek to reduce your claim accordingly otherwise). I would speak to your trustee again on this matter and ask them to get in touch with HMRC.

Any debt that you were liable for before the signing of the trust deed is included - regardless of whether they were originally omitted or not. Again, your trustee would be the person to deal with any creditors that are still chasing you for any such debts.

Overall, though, I would agree that a trust deed over 6 years does not sound like a tempting prospect! You are going to need your trustee's cooperation to switch to another option such as sequestration however, so should discuss your concerns with them and try and agree on a way forward.

Thanks for correcting the point on the tax credits Kevin. I was thinking of something slightly different as I wrote that and appreciate your clarification.

It will be interesting to note whether DAS was mentioned as an alternative to missk88.

There was no alternatives really spoke about except the trust deed and sequestration. I was struggling with the debts due to a high volume of lenders 🙁 everyone wanting at least £5 per week, my main debitor had an earnings arrest meant of £270 a month on my earnings so the trust deed seemed like a way to save money.

I phoned today and was told my ex partner's debts are irrelevant and this is definitely the best service for me. I am going to ask in writing to get a formal response. Over the next 3yrs I am going to be getting an extra £4000 in wage incremements which will probably get swallowed up too 🙁

Do you think it's because my practitioner is based in England? Or do you think they are just as experienced?

I just feel like I've made a big mistake 🙁

I should add that I have literally no assets at all...sequestration seems to be the best option...a whole year less of payments too :/ is there an online list of what is taken into account for outgoings when you are sequestrated? It says on a few websites that you only make contributions for one year... Is it up to the practioner how
long?

Hi missk88.

Those sites are wrong. If you can afford payments they'll be made for three years in sequestration.

Why did you choose a trust deed over sequestration after both were mentioned in the advice given to you?

My advisor said that sequestration should always be a last resort :/ seems it would have been the better option for me. I don't understand what will happen with these joint debts if my ex is paying them off...seems strange :/

I'll just need to plod on and hope that I don't end up in the trust deed for longer 🙁 I am surprised also that everyone I have spoken to seems to have an initial three year trust deed but I was never given this option. The £195 quoted on the phone was quoted even before I done an income and expenditure and it has remained throughout the signing up process.

I can only imagine that it's a coincidence that you were "quoted" £195 before looking into your circumstances and then, when they did, it turned out £195 was the precise amount you could afford.

If it wasn't a coincidence it might seem quite strange.

Does your trust deed document specify how much the fees will be?

You already had an earnings arrestment in place, and still they recommended a trust deed?

Surely that should have been an indication that DAS, or sequestration, would be a better option in your case!

Those options will stop an existing earnings arrestment. A trust deed won't.

I think you do need to ask your trustee for a detailed written answer to the questions you've been asking.

Hi candlewick.

We've often heard from our experts that they've had success persuading creditors to stop an earnings arrestment and to become part of a trust deed.

I presume the rationale may be that if they don't sequestration may follow anyway.

We do need to hear from missk88 to confirm that the arrestment has been included in the trust deed.

The earnings arrestment was removed with no issues. They wouldn't remove it until I was protected though. It was from a local authority though so maybe they are more flexible. They were my biggest creditor of the £6k x

Ok, so the arrestment wasn't in place when you signed the trust deed. That makes more sense.

I know trustees in a trust deed may be able to negotiate with a creditor who has an earnings arrestment in place. But there's no need for negotiation if a DAS is approved or a sequestration is awarded. The arrestment goes.

In a case like missk's where - even when all debts are taken into account - it seems like it could all have been paid off in about four years, the advice to "sign a trust deed" seems very odd.