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 My Experience with a Trust Deed

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T O P I C    R E V I E W
thomsen Posted - 15 June 2022 : 15:26:42
First off, I just want to say a big thanks to the advisors on this forum and anyone else that has assisted me over the last while. It has been greatly appreciated. I just wish I’d found this forum before starting a Trust Deed.

Secondly, I want to apologise for the long post. I just want to share our story and hopefully provide a bit of insight for anyone else going down the same path.

Anyone considering a Trust Deed – Please Read!

Back in 2016 my wife and I had racked up around £18k in debt. This was a combination of a £4k joint account overdraft that we were always using, some credit cards, some store cards, and finance on a sofa. I’m not making excuses; the fault lies entirely with ourselves. We were spending more than we were earning. It was basically bad money management.

When the outgoings were becoming too much to handle, we started exploring a few avenues. One radio advert caught our attention. It was an advert for a Trust Deed offering to reduce your debts and give you one fixed monthly payment for a set number of years. It sounded too good to be true so we enquired. Before we knew it, we had an IFA at our house to run through the details.

I don’t have any evidence other than the fact that my wife and I were in the room when this was said but we specifically asked the following – Can we move house while we’re in a Trust Deed? This was our biggest concern. We had one child at the time and we wanted to move to a better location before he started school. The answer we were given was “Yes, that shouldn’t be a problem”. We knew very little about Trust Deeds. This was not a true statement or at least not true when you consider we were specifically talking about selling our small property and moving to a new one. The IFA knew this.

Within a few days a representative from the company handling the Trust Deed was at our house with the paperwork to sign. It was going solely in my name since all of the accounts were mainly in my name. Every page had a sticker where to sign. I was rushed through this (they told me they needed to get home before rush hour) and given no time to read through it. I was blinded by the thought of clearing the debt and went into this without the appropriate due diligence. I signed away and this is one of the biggest regrets of my life. 5 years at £130/month didn’t sound too bad at the time. There was an additional year added as we were living in a mortgaged property.

When it happens, you are told to stop all payments to lenders. Cut repayments to everything no matter how small. This didn’t feel right straight away. You are told you are protected which is true however only from legal action/debt recovery. From this point you are not protected from the multiple black marks applied to your record that will remain there for 6 years (or more). You are not protected from repaying any joint debt. You are not protected from your payment contributions to the trust deed increasing. You are not safe to apply for anything related to credit in any way. You are not protected from the many embarrassments this may cause in your life. You are not assisted in any way during or after the Trust Deed (or at least I wasn’t).

Since I was the only one in the Trust Deed my wife was chased a few months down the line by a recovery company to pay for the joint overdraft. We paid off the £4k in a separate agreement.

The monthly payments to the Trust Deed tripled. They decided after a 6 monthly full income and expenditure assessment that I could pay more.

I needed some dental work and was refused interest free credit of a relatively low amount (I kind of expected that to be honest).

I wanted to move to a pay monthly sim only phone contract and was declined. I was declined for many things, things you don’t even realise include a credit check.

I started work for a financial company and they had to put this Trust Deed down as a risk. They only found out after my probationary period; I was told if they found out earlier, I would not have received the job. My line manager was involved and it felt awful sharing this information.

You are told to empty your bank accounts of any money and open a new one. I did as was told and applied for a new account at a different bank. My friends and family weren’t aware and someone transferred some money to me not realising my bank account had changed. I had to visit the old bank branch with all my Trust Deed documentation to withdraw this small cash amount as my accounts were frozen. Having to sit with the bank manager and go through this just to receive that small cash amount was another low point in my life.

When they say a Trust Deed “may impact your credit rating”. It absolutely will. It destroyed mine. It affected my life in such a way that I can never ever recommend a Trust Deed to anyone. We entered this for an amount that I now think could have been paid back through other less-impactful means. I take full responsibility for the debt but I do not feel we were made aware of how devastating the impact would be. We still haven’t been able to move house – I still can’t get a mortgage over a year after discharge. I still have black marks on my credit report despite the Trust Deed no longer being on there. I’m told the criteria for some mortgage lenders is 3 years from discharge. That’s a whole 8 years from signing. I would never have agreed to this if I had this information beforehand.

This has been a real harsh life lesson. I have learned to be better with money although I still have my flaws – a Trust Deed doesn’t make you better at handling money. I will now do very thorough research before ever agreeing to something as important as this. I will try and advise anyone considering a Trust Deed to look at all other options first. Please, consider talking to your bank or the lenders directly before going down this route. I really wish I had.

I am grateful to have the debt cleared but after the monthly amount increased the final reduction to the total debt was minimal – especially after having to pay off the overdraft separately (they kept that listed in the Trust Deed interestingly enough). I’m relatively confident that I could have contacted the lenders individually and agreed on a repayment plan that would have been far less impactful. A Trust Deed may be right for some people, others may have had a better experience. This is just how it went for me. I would just stress that you do all the necessary research beforehand.
15   L A T E S T    R E P L I E S    (Newest First)
Kevin Mapstone Posted - 10 August 2022 : 08:39:03
Thanks - that's really useful information, Thomsen.
thomsen Posted - 10 August 2022 : 07:26:00
Yes, I'm as surprised as you are. Even the mortgage advisor didn't think it was going to be possible. I don't think there is anything against mentioning company names here so it was Halifax I got the mortgage with. Their T&C's didn't specify how long you have to have been discharged for, only that it had been 6 years since you entered one. Something along those lines. I was required to put a 15% deposit down as some blemishes still linger on my credit report.

[i]Originally posted by SmithyJ[/i]
[br]Hi Thomsen,

Obviously, everyones circumstances are different, but are you saying just 3 months after the TD fallped off your credit report a high street lender accepted your application?

I'm still waiting for my personal discharge since Feb 21 due to ongoing personal injury claim which has only recently been settled so by the time the TD company process everything my TD should fall off credit report end of Jan 23.

Even during the TD i was able to get 2 credit cards and on finishing my last payment i obtained car finance albeit not at the best rate. I would be hopeful that with both my wage and my partners we would be able to access a mortgage shortly after it falls off my file.

SmithyJ Posted - 01 August 2022 : 20:13:36
Hi Kevin,

I certainly will update the forum on how things progress as I do feel it's important to share our own knowledge and experiences of the TD process.
Kevin Mapstone Posted - 01 August 2022 : 17:45:42
I think it is generally 2 years from your discharge from the Trust Deed, based on feedback we have had on this forum previously. For most people discharge is after 4 years, so it would roughly coincide with the 6-year point at which the Trust Deed should disappear from their credit report.
Obviously this isn't the case for you if your discharge has been delayed. However, I don't think there are any hard and fast rules here, and it may well be possible for you to access mortgage lending at that same point even though you may only have been discharged fairly recently prior to that.
Fingers crossed for you. It'd be interesting to hear what happens if you don't mind updating this on the forum.
SmithyJ Posted - 01 August 2022 : 16:59:22
Hi Kevin,

I made my 48th payment in Feb 21, and due to ongoing personal injury claim (just setted) which has delayed my personal discharge, by the time it's sorted, i'll be getting closer to end of Jan 22 where the TD hopefully falls off the credit report. Are you saying it's generally 2 years from it fallping off your credit report which mainstream lenders consider?
Kevin Mapstone Posted - 01 August 2022 : 11:11:52
Hi weedannii. I think it is unlikely that you will be a get a mortgage whilst in a Trust Deed, I'm afraid. I believe most mainstream lenders will actually need you to have been discharged from your Trust Deed for 2 years before they would offer it.

In any case, you are likely to have to have some funds saved for a deposit first, which would presumably be difficult for you until afterwards given that you have to pay in as much as you can reasonably afford each month towards your debts during the Trust Deed.
weedannii Posted - 29 July 2022 : 18:35:31
dos a trusted deed mean you cant get morgage when your in it or did yous need to wait til it finished just started trusted debt with j3 not need morgage until i get better job and good to no were to go when i do need 1
SmithyJ Posted - 29 July 2022 : 10:29:09
Hi Thomsen,

Obviously, everyones circumstances are different, but are you saying just 3 months after the TD fallped off your credit report a high street lender accepted your application?

I'm still waiting for my personal discharge since Feb 21 due to ongoing personal injury claim which has only recently been settled so by the time the TD company process everything my TD should fall off credit report end of Jan 23.

Even during the TD i was able to get 2 credit cards and on finishing my last payment i obtained car finance albeit not at the best rate. I would be hopeful that with both my wage and my partners we would be able to access a mortgage shortly after it falls off my file.
thomsen Posted - 28 July 2022 : 23:05:39
I just wanted to add a quick update. 15 months after discharge from the 5 year trust deed and I have been successful in applying for a mortgage. This is with a high street lender at a good rate as well. There is light at the end of the tunnel. I should also say that I applied for broadband at the new property and my credit check failed and I was declined. How about that?
SmithyJ Posted - 15 July 2022 : 10:56:56

I get the point around potential risks of falling into the same trap again, but as you know it only takes a specific life event and this might be the only way out. In terms of housing and mortgages, I think access to these for people coming out of a TD should be a core element to any help to buy scheme, as the risk is different to racking up £20000 on credit cards where there are no assets, unlike a property which in current market will only go up in value.

I also think the current credit scoring process was only designed to ensure financial services profit, as it only serves to drive those with low scores into the cycle of only being able to obtain high interest loans etc. In every other walk of life discrimination of this kind would not be tolerated, but in this case seems that too many are making a handsome profit to be even in the slightest bothered.
TDA (Debt Adviser) Posted - 15 July 2022 : 10:23:06
Hi SmithyJ,

For those currently considering how to deal with their debts, it's always worth getting advice from more than one source and only getting advice from FCA authorised and registered debt advisers. I know this shouldn't be the case (people obviously shouldn't ever be taken advantage of) but this is the current reality and it's wise for people to take extra time and care when making such a big decison.

Regarding your point on mortgages I fully understand where you're coming from. Many people get into debt through little or no fault of their own, and many people become much better money managers as a result of living on a restricted budget without access to credit during a debt solution.

One point that sticks with me however is a credit reference agency presentation I attended some time ago. Their data regarding people who had previously been in an IVA (similar to a trust deed in the rest of the UK) was that, on average, this group had more credit problems in the future than those that hadn't ever been in an IVA. This may explain why many mortgage lenders want people to wait a few years after completing a trust deed before offering mortgages to them.
SmithyJ Posted - 14 July 2022 : 20:58:58
Some good points on here. I would agree that most people on entering a trust deed probably aren't fully aware of all options and the middle men companies seem to guide you down the TD route 'probably commission reasons'.

I think it won't be long before either the government need to put something specific in place to ensure that those with completed TD's can access a mortgage deal straight after it falls off credit report as the markets are set up by them to create discrimination and inequity. What will happen is that for many of us even though the TD is completed we were all at times of great distress mis-sold this option and as has been proven with PPI etc. entitlement to claim against being sold this is inevitable in the future.
GemmaGG Posted - 23 June 2022 : 13:01:20
Thank you Nicci_36, glad to know you have at least had a successful outcome. Middleman does seem alarming though to be really honest
Nicci_36 Posted - 23 June 2022 : 12:38:20
I went through J&R financial solutions but they refer you to carrington dean who my trust deed is actually with.

It would appear J&R are a middle man.

GemmaGG Posted - 22 June 2022 : 19:01:32
Did anyone here do their trust deed with J&R financial solutions? xx

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