Hi loobur

Yes, your part of the deal is to pay the total agreed at the start. In the circumstances described, if the contribution is reduced, then the period will be extended.

Mark

Thank you Mark for your quick reply. If the period is extended is it just a case that the creditors just have wait to get any kind of payment? I understand my trustee is taking a large amount and the remainder being split between creditors. This is minimal and I kind of thought they would just be happy to receive some kind of payment rather than wait until I can pay the total amount. Thanks again !

Hi loobur

Yes, creditors will wait until the whole sum has been received.

Mark

Mark

I know of at least one case where a TD wasn't extended as the reduction in payment was beyond the debtors control....

Hi tinsoldier

Guidance is to engather the sum agreed at the start or sequestrate. I've always argued that trust deeds are creditor driven and the decision should be theirs.

Mark

hi loobur

I would agree with both Mark & tinsoldier. The Trustee has to do the best he can for creditors. However, as tinsoldier says, if the change in circumstances is considered to be outwith your control, then the Trust Deed might not be extended. I can only speak for my firm and our Trustees. What you cannot do is just reduce payments for no valid reason.

I agree with Shona. The circumstances surrounding the change in cirumstances should be taken into account and I don't believe that a trustee must always ingather as much as is stated in the initial proposals. After all, the initial proposals are only based on an estimate of what someone is likely to be able to pay in over the course of 3 years and are accepted by creditors on that basis.

Kevin

That's basically what happened in my case - i went down to a 4 day week at work and just could not maintain my payment but did pay a reduced sum - my TD still ran for 36 months thanks to the flexibility of my trustee

Hi tinsoldier.

The reasons behind a change of circumstances seem to be very important.

This thread from loobur and also the thread from last night started by puggy1 are both based on scenarios where an individual chooses to change their circumstances.

I think we could all fully understand why loobur is considering changing her circumstances, and puggy1 has decided to take steps to improve his/her future prospects which is something we also all might want to do at some point in the future.

These decisions do however have implications for the creditors who agreed to the trust deed based upon the information presented to them at the start of the trust deed process.
The Trustee therefore needs to weigh up the interests of the creditors as well when such decisions are made.

Hi TDA

I agree completely with you. My circumstances came about because of an unprecedented economic downturn (at least in my working lifetime) and i took a cut of 20% in salary along with rising living costs which my trustee was kind enough to be flexible with.

If someone chooses to change their circumstances then that's a totally different scenario i agree.

Mine and my husband's contributions were reduced for reasons out with our control and therefore we had no extension.
However as Tinsoldier said if someone chooses to give up work or move house to a more expensive property then this is a choice which will reduce the amount they can pay and extensions are very much likely.

I do have to mention the point mark made about having agreed at the start of the trust deed to pay a certain amount. I feel that this is essentially true however this is subject to 6 monthly reviews, what is the point in these reviews if not to make sure that based on economy chances and the cost of living altering that reasonable adjustments in contributions can be made without the knock on effect of extensions.

Hi gemgem.

Your point makes sense, and reviews do have a purpose. I think Mark, Kevin and Shona are referring to the interpretation of the relevant guidance and law that each firm has come to.

The ability to reduce a payment if affordability has declined is clearly there and should happen if necessary after a review. The question then becomes how to balance the interests of the creditors and the person in the trust deed when such a reduction happens.

In such circumstances should the creditors expect the same return that they originally agreed to as a result of the client continuing to pay an affordable amount for a little longer?

Or is it right that the client only pays into the trust deed for the period originally envisaged with the creditors receiving less or nothing because of this?

The Trustee obviously has to weigh these different interests when they make a judgment.

TDA,
I agree with what your saying however wonder if the creditors initial agreement is a sum subject to review and therefore they might expect a little more or little less with changes in the economy.

Kevin certainly made the point earlier in the thread that the offer to creditors is an estimate of what their client is likely to be able to pay over the period and that they accept it on that basis. I know from speaking to Mark that he has asked this question directly to someone working in the supervision of trust deeds and was advised, as he writes below, that "guidance is to engather the sum agreed at the start or sequestrate". I get the impression that things aren't always 100% clear for those working in this area as well as for those that use their services.