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manlyjpanda
Just Joined

1 Posts

Posted - 07 September 2018 :  10:22:09  Show Profile  Reply with Quote
Hi everyone, this seems like a friendly forum.
I'm about to enter a trust deed arrangement and have had a call with the firm that will deal with the trust deed. I'm worried about a couple of things.

First, the advisor I spoke to originally had a drastically different valuation of my house and I was told on the call that the valuation they intended to use was actually 20% more than the one I had submitted the paperwork for.

Secondly, I was told on the phone that there would be a minimum amount each month that my payment would be set at. As in, not that I would be locked in to a payment each month (I get that), but that there is a minimum amount that they would require at set up, regardless of affordability. That amount was in the region of £250-300.

Both these things make me nervous about using this company to enter my arrangement. Can anyone put my mind to rest on this? Or recommend an alternative company?

Cheers!

Lola2304
New Member

5 Posts

Posted - 07 September 2018 :  10:58:33  Show Profile  Reply with Quote
Hi, I am afraid I can't help with your first query and things may have changed since my trust deed was set up in 2013, but I had to submit to the company I used a income and expenditure table and from there they calculated what my monthly payment would be. If there was any change in my income (i.e salary increase or bonus) then I would contact the company and update my information and they would give me a new amount to pay. I certainly did not pay anything upfront to arrange my trust deed.
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TDA (Debt Adviser)
Trust Deed Expert



12644 Posts

Posted - 07 September 2018 :  11:57:19  Show Profile  Reply with Quote
Welcome to the forum manlyjpanda.

Regarding the property valuation, I think you need to satisfy yourself on two subjects. Firstly, do you believe the valuation being used to be accurate and fair? Secondly, will the increased valuation have any implications for how your trust deed will work?

These are two really important questions. Many of the most difficult issues that have been raised here relate to how property has been dealt with in trust deeds. I would not proceed until you're entirely confident in this area and have a written record that you can refer back to if there's is any debate or confusion later.

I would expect all payments into a trust deed to be based upon an affordability calculation. Otherwise, how will you be able to cover your household bills and expenses? As written here, this does sound a little odd (though there may be a reasonable explanation and/or misunderstanding I guess).

This site recommends the firms represented here by Kevin and Sharon. We're not saying these are the only good firms out there, but many forum members have been helped by them over the years.

Sometimes a second opinion can be valuable. chooseing a firm is a significant decision because of the nature of your future relationship over at least a four year period.

Qualified Debt Adviser & Forum Administrator - Ask me anything about Trust Deeds    
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Kevin Mapstone
Trust Deed Expert



3613 Posts

Posted - 07 September 2018 :  12:09:47  Show Profile  Reply with Quote
Good for you that you aren't just rushing into anything, manlyjpanda. If your gut instinct is telling you that something is not quite right then it is usually wise to listen to it - especially when it comes to something as important as your home.

Has anybody been out to inspect your home for the purposes of the valuation? We always do this if possible, to ensure that the valuation does stand up to scrutiny. Desktop valuations can be very inaccurate sometimes. If they are saying that your home is worth more than you believe then it may well be in your interest to get a second opinion.

As Trust Deed Assistant has said, your monthly payments should be based purely on what is reasonably affordable. It sounds like they are looking at this the wrong way round - fitting your circumstances to their preferred solution, rather than identifying the best solution for your circumstances.

If it is a set-up fee of some sort that they are looking for from you then I'd be very wary - most good firms, including the two represented here, wouldn't look for any kind of up-front payment like that.

It's very difficult to say whether a Trust Deed is a good option for you or not, without knowing a lot more detail about your situation. I'd be happy to look at it for you though if you wish, as I'm sure Sharon would too.

Recommended Partner & Trust Deed Expert - Ask me for help setting up a Scottish Trust Deed    

Edited by - Kevin Mapstone on 07 September 2018 12:15:01
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Swandog
Advanced Contributor

70 Posts

Posted - 07 September 2018 :  12:16:03  Show Profile  Reply with Quote
Hi manlyjpanda and welcome to the forum.

When you say you submitted a valuation was this done by someone qualified to value a property i.e. a surveyor? Equity in a property needs to be established by confirming the value and outstanding mortgage. Once this calculated it should then be confirmed in writing.

In terms of a payment per month to a Trust Deed depending on the size of your debt and who you owe money to there will be a “minimum payment” that would need to be paid for the creditors to be happy and accept the Trust Deed proposal.

Your payment should always be based on affordability and a thorough income and expenditure should be completed to establish what you can afford to pay. If after doing this you can afford a payment which the lenders will accept then a Trust Deed may be suitable. If after a budget is completed with you all you can afford is £100 per month and the “minimum payment” for creditors to accept is £250-300 then you need to consider is a Trust Deed affordable for you. You don’t want to commit to a payment when you can’t afford it. Then you need to look at alternative options.

If you are having some niggling doubts about the company and advisor you are using then it’s always a good idea to look for a second opinion.

I would take my time, ask lots of questions and seek a second opinion. If you do that then you should enter into a plan which is suitable and affordable for you.
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