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3 Posts

Posted - 07 April 2018 :  23:55:57  Show Profile  Reply with Quote
Hi guys,

First time poster here - I've been in my Trust Deed for about 8 months so far (out of 48) and I have a few queries.

1) Generally speaking, what are the rules about saving money whilst in a TD? I'm not the type of person who likes to have 0 in the bank at the end of each month, so I try to set aside some money each month into a separate account (Paypal or Revolut) in case I need emergency cash.

2) I recently got a wage increase but forgot to tell my TD provider about it (currently the weekend so I will be calling on Monday). I will also be moving home next month and I am unsure of how my expenditures will be impacted by this - how would a TD provider normally deal with this? Would I be given sufficient time to see how my expenditure changes before a judgement is made on if my payment amounts have to change?

3) I'm due for my first annual review in August. For the past two months I have been traveling for Work and my meals etc have been paid by my work, so I've been spending less money as I've not had to buy food etc for myself. Is it likely my TD provider will understand this and not use it as a reason to bump up my payments?

New Member

3 Posts

Posted - 08 April 2018 :  00:10:06  Show Profile  Reply with Quote
Sorry for the double post, I have another query but can't edit my previous post for some reason:

4) When I signed up for the TD and went through my financial assessment, my adviser "tweaked" some numbers as the initial assessment showed that I would end up paying more than my total debt was worth over the 4 years (I don't know the exact math, my debt is worth about 13k total, my monthly repayments are 90 going up to 280 when my car HP ends in Feb 2020), what happens if at my next review my payments go up considerably to a point where I end up paying back more than the debt is worth?

Edited by - KSTrustDeed on 08 April 2018 00:10:55
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TDA (Debt Adviser)
Trust Deed Expert

12692 Posts

Posted - 09 April 2018 :  09:14:28  Show Profile  Reply with Quote
Welcome to the forum KSTrustDeed.

There's no hard and fast rules about saving during a trust deed.

If you were setting aside large amounts of money regularly it might beg a question about whether your contribution has been set at the right level. If you're setting aside modest amounts of money then that would simply seem sensible to cover inevitable but not weekly/monthly expenditure (such as car maintenance for example).

I can't see how your contribution could be reassessed until you know what your new bills will be.

I'm not sure your trustee will be looking hard at expenditure on food for the period you've been working away. This is a budget for you to work around, rather than being a bill (like council tax or rent) which pretty much "is what it is".

It is possible to pay more than you owe during a trust deed. If things improve you could end up paying the total of your debt, interest on the debt, and your trustee's fees. If you reach this point then the trust deed could end early.

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Kevin Mapstone
Trust Deed Expert

3625 Posts

Posted - 09 April 2018 :  15:14:53  Show Profile  Reply with Quote
Hi KSTrustDeed, and thanks for posting.

The formal guidance to Trustees says that they can allow an amount for contingencies in a person's budget, but that it is restricted to 10% of your monthly disposable income up to a maximum of 20pm. If you are currently paying 90pm then I guess 10pm will have been allowed for contingencies (ie 10% of 100pm available, bringing you down to 90pm contributions).

In reality it is more complicated, as you may also be putting funds aside for other areas of your budget which are paid less frequently, such as car repairs.

As Trust Deed Assistant rightly says, if you have a large amount saved then it could be viewed as a sign that you can afford more to your trust deed and your payment level could be adjusted accordingly.

The part about your expenditure being "tweaked" to ensure that your debts wouldn't be repayable within 4 years is rather worrying to be honest. Are you saying that you feel that you could afford to pay more than you are currently?

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