Welcome to the forum ella1.

My understanding is that making a joint universal credit claim will not link your credit files.

Trustees shouldn't accept payments funded by benefit income. I'd suggest that you get in touch with them so that you can begin to work out a suitable way forwards.

Hi ella1 and welcome to the forum.

Under the legislation we are not allowed to take a payment from any state benefits. This includes statutory maternity pay and also universal credit. You might want to discuss this with your Trustee.

I think you have two options here:

1. Stop making payments to the Trust Deed as you are on benefits and request to be released from the Trust Deed and then go down the route of Sequestration. If you are on benefits and your debts are less than £17,000 and you don’t have any assets then you can pay a £90 application fee and proceed down the Minimal Asset Process Bankruptcy. This will clear your debts and you will be debt free in 6 months. Do you have any assets?

2. IF you don’t want to proceed down the option number 1 then a payment can be accepted from a third party i.e. your partner as long as he as a private income and he himself isn’t on benefits. He would need to pay the agreed payment for the remaining period of your Trust Deed which could be 2 years.

I’d encourage you to think about your options and seriously about option number 1. It would be a very effective way of clearing your debts and allowing you to move on with life rather than struggle with one income in the house whilst your partner is trying to save to buy a house.

In terms of being financially linked a joint benefit claim from what I understand will not show up on your credit reports. I tends to be financial links in terms of commercial lending i.e. bank account, joint loan or credit card etc. I don't see a joint benefit claim having an impact on your partners ability to secure a mortgage in their own name.

Hi, thank you both for your responses.

I have no assets and my debt was £8000. My partner makes the payments just now as we didnt want to put the trust deed on hold.

Can I ask, if I go for option 1, how long will I be black listed compared to now, just being in a trust deed? Also, if I apply for universal credit (must be a joint claim), won't he technically be receiving benefits, therefore unable to continue to make the payments for me? As we are living together there is no way of me making the claim on my own as it is based on his income. He works fulltime and is self employed.

Many thanks
Ella

Hi ella1.

There's no such thing as a credit blacklist, but I do know what you mean. Any "event" that goes onto your credit report stays there for six years. So if you went bankrupt today, the bankruptcy would be visible on your credit report for six years from today.

Will your partner continue to work?

Yes he will definitely be working, so is he still able to make the payments on my behalf even though it's a joint benefit application?

Essentially we want to be able to buy a house together (he will be buying in the next few years under his name) in 4-5 years so I want to start working on building my credit rating as quickly as I can after my trust deed ends. Is it right that it will be gone from my file 2 years after the 4 year trust deed ends? So 6 years in total?

The trustee may well be prepared to accept a payment from him ella1.

It's not an issue receiving benefits, the issue is when someone only receives benefits. So long as his earnings add up to more than your trust deed payment this may well be fine.

Hi ella1,

How much is your Trust Deed payment per month?

If someone’s income is solely benefits then a payment cannot be taken from them. If they have a mixture of benefits and private income i.e. from a job or private pension or rental income from a lodger etc then a payment can be taken. Sorry I should have made that a bit clearer.

Ultimately if you and your partner are happy to continue with the Trust Deed and it’s a payment that between you he can afford to pay then the Trust Deed can continue for the remaining 2 years. This should enable you to rebuild your credit file approx. 2-3 years quicker than if you went into a Bankruptcy.

In terms of your credit file, as TDA has advised any entry on this remains there for 6 years. When it comes to a Trust Deed or a Bankruptcy a lender will put a default against their record for the debt. This default will remain in place for 6 years from when it goes on. What we see is that a lender won’t place the default until 1,2 or 3 years after the Trust Deed or Bankruptcy starts. If that’s the case then you can write to the lender and ask them to back date default date so that all of the default will fall off just after the 6 years from entering into a Trust Deed or Bankruptcy. That’s my understanding of how it all works.

You need to do what feels right for you and your family. If that is sticking with the Trust Deed rather than going down the route of Bankruptcy then do that. Just make sure you get all the advice on your options first and then decide what’s best for you.

It's 120 per month. I am planning on being back in work by summer next year so will be able to resume payments myself. I am now happy I can apply for Universal Credit. I think sticking with the trust deed is best for what we are planning for the future. I will definitely be requesting the defaults get backdated. Thanks for all of the information, it has helped a lot!

You are welcome. I think for what you are trying to do long term in terms of credit rating and also buying as house, as long as between you the payment is affordable at the £120 per month then you will be fine and it saves doing a Bankruptcy.

Good morning, I was looking for some advise please, I am actively in a trust deed, when I signed up for this approximately 3 years ago I was led to believe that it would not include my home or my car as assets, firstly they advised myself that my home had no equity when they done a drive by valuation & secondly I was led to believe if I extended my trust deed from 48 months to 60 months this would confirm the above, the adviser whom came to my house was very nice & sincere & I stupidly did not read the forms I just took his word as gospel & signed on the dotted lines. I’ve only just discovered that this is absolutely not the case, I’m in the process of selling my home, the missives were due to be signed yesterday & I had a call from my solicitor stating it forms part of a trust deed, I’m in absolute disbelief, I’ve since contacted Carrington Dean & they have advised that it most definitely is included in the Trust Deed & I cant sell my home without my trustee firstly agreeing to it & signing the missives & secondly that all my equity in my home will need to be transferred to them to clear off the existing debt in full & then they take fees & interest on top, to my horror my debt was initially for an amount of £23k, I’ve paid approximately £5k out to date & now they are saying they will take a further in excess of £33k from my house sale. I keep calling Carrington Dean but unfortunately the uk offices do not deal with this, they only set you up on a trust deed, so I am being transferred to advisors in Mauritius but I get no confirmation & I’m struggling at times with the language barrier, I keep being told the same thing, they will email me with a settlement figure & explain in full but i’m still waiting. Can anyone please advise if there is anything I can do re my belief to being mis-sold my Trust Deed, I would have NEVER signed up for anything willingly knowing I was jeopardising my family’s home & everything I’ve worked for & secondly I feel that the fees are extortionate, I know some of my creditors have sold my debt on since I opted to enter a trust deed, so my initial debt will now be lower but CD advise this doesn’t matter, I must pay them back the initial debt in full, surely if the debts are lower I should not have to pay more? Also in relation to my house sale, apparently the Trustee has to sign this but I’ve been given no indication of how long this process takes, the new buyers are due to move in next Friday, I feel so angry & upset with myself for not reading the papers & now I may need to let another family down very last minute by pulling on my house sale. Any help or advise would be greatly appreciated, thank you. Kat

Welcome to the forum KAT.

I think a couple of things have become mixed up here unfortunately.

A trust deed is a form of personal insolvency, like bankruptcy. A trustee has to look at whether your assets can be used to repay your creditors.

If the amount of equity in your property at the start of the trust deed was limited, it's perfectly possible (as seems to have happened here) that an extended number of payments would take care of that equity.

This is all dependent upon the home not actually being sold though. If it is sold (which can only happen with the consent of your trustee) then the situation changes.

If there's a profit on the sale the trustee will, quite rightly, look to return more of what is owed to the creditors. A trust deed writes off the debt that you cannot afford to repay. If things change (before your discharge) and you can afford to pay your debts in full, this is what will happen.

Debt being sold is a bit of a red herring I'm afraid. They might have been sold for less than you owed, but you still owe the purchaser of the debt the full amount that was owed.

I'm really sorry that this isn't the information you will have wanted to receive. Your trustee has obligations to your creditors here; if you want the sale to go ahead you'll have to work with them to find a way forwards that will achieve this.

Thank you for your prompt response, after lots of research I have a better understanding of what I have wrongfully & misguidedly previously signed, I completely accept that I will need to pay back my debt to the creditors, what I don’t agree with is the excessive charges & the wrongfully sold Trust deed to myself, this is meant to be a company whom help vulnerable people when they are in desperate need of financial guidance & help, for approximately 3 years I’ve lived with “bad credit” due to signing a trust deed, my mortgage rates inflated significantly & I could not remortgage due to my bad credit, I found myself paying back not only the £180 monthly trust deed fees but higher interest rates for years on my home, again had this been pointed out to myself I’d have had a better understanding & i’d have absolutely not signed up for this. I’m now overall financially worse off than I was 3 years ago due to the excessive hidden charges of Carrington dean & the lack of honesty & clear advise. I knew at the start before even entering the trust deed that I had equity in my home, I was very upfront about this however my “Trustee” advised me not to concern myself, the drive by valuation showed I had no equity & by signing the extra year my house was not included as it wasn’t as asset as it had no equity. I’m determined that I’ve been mis-led by my “Trustee” if I were to complain to the financial ombudsman would this be something they would consider? I’m not looking to opt out of paying my creditors, that was my debt & I rightfully need to pay it but Carrington Dean are benefitting substantially from misleadingly myself & giving me the wrong financial advise. Thank you

Hi KAT,

I think we need to be careful with language, albeit I understand you may be angry and/or frustrated. You may genuinely perceive issues regarding honesty and having been misled, but the company may feel justified in taking a different view (and almost certainly wont feel able to respond here).

You are of course entirely within your rights to make a complaint. The Financial Ombudsman Service does not deal with insolvency practitioner matters. Any complaint should go to the firm first. If you're unhappy with their response, the complaint can then be taken to the professional body of which your trustee is a member. This is where the rights and wrongs can get sorted out if you cannot find agreement directly with the firm.

Will you continue with the sale of the property?

Thank you, I will take your advise on board:)

I honestly don’t know what to do, I’m at a loss with it all, if I continue with the sale I leave myself & family little equity to start again & if I pull on the house sale I will let a family down & leave them only a week to find a new home which doesn’t sit right with myself, I’m still awaiting correspondence from CD so I shall need to see what the full figures are & then make that decision.

Can you tell me please if I do opt for the latter & pay of the entirety of the Trust Deed & fees, will this be me free completely of the trust deed & how long will it take to be discharged? Thank you