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Regular Contributor

16 Posts

Posted - 03 November 2017 :  19:56:32  Show Profile  Reply with Quote
What are the rules about opening a savings account during a TD to put a small amount aside to cover emergency expenses, car repairs etc ?

I was told that that savings accounts were allowed, but you had to declare what the money was for and that amount paid in HAD to be equal to what was originally on the income / expendature form. If I, for example, had 50 assigned per month for car maintenance then I was told that could go into a savings account provided it was then used for a service / MOT. I was also told that I would NOT be allowed to save for a deposit when it came to changing my car (which is on a PCP which ends in 2019. I'm now concerned about

(1) Saving for a 'rainy day' and having it taken for my creditors at review time
(2) How I will replace my car in 18 months time without any form of deposit which is often required for HP or PCP

Kevin Mapstone
Trust Deed Expert

3597 Posts

Posted - 05 November 2017 :  15:09:13  Show Profile  Reply with Quote
It's a tricky one to be honest, as the regulations state that the trustee must apply the Common Financial Tool and that any spare income left over must be paid in to the Trust Deed. You would need to convince your trustee that saving an amount for a deposit on your next car is necessary, in which case it could be allowed. There are no specific rules about this particular scenario though, so it is really up to your trustee to judge what is in the best interests of creditors.

There is a contingency allowance, which is really the only way that you can put a bit aside otherwise, but the maximum allowed is 20 per month, or less if you are paying less than 200pm.

It might be possible to convert the balloon payment for the PCP into a loan with your current finance provider when the time comes - I am aware of people being able to do so occasionally. If you are paying around the same amount as you are now each month then that might be acceptable?

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