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 HELP! New TD & situation has changed
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RMMT1
New Member

3 Posts

Posted - 13 August 2021 :  15:28:26  Show Profile  Reply with Quote
Hello,

I'm hoping someone can help or advise please?

A little background, I'm only 1 payment into my 4 year TD plan and my work situation has changed. I was working FT/40hr weeks from April and now in an ugly situation with my now ex-employer due to disability discrimination and my work contract has been terminated as per Thursday 5th August.

Now I am "unemployed" but I have enough income to pay my bills & TD this month (30th August).

I want to start my own business as a sole trader, is this advisable at this time or is it a big NO NO? My partner also wants to start his own "side hustle" along with his FT job and prefers limited company approach - could I work for him under his limited company?

I know it's only been a week but with the world the way it is, I don't think finding a full time, permanent job is going to be very easy. And I also don't want to wait 4 years+ to start a business simply because I have a Trust Deed and repaying debts I stupidly made in my early 20's.

If any of advisors need more background or info, I am happy to provide further.

Any advise is much appreciated!
Thanks in advanced!

TDA (Debt Adviser)
Trust Deed Expert



13799 Posts

Posted - 13 August 2021 :  16:03:30  Show Profile  Reply with Quote
Hi RMMT1 and welcome to the forum.

There's nothing stopping you from becoming self-employed or working for a new limited company operated by your partner.

Like any change of circumstances you should keep your trustee updated, and especially so if it results in a change in your income.

If your income increases it could result in an increase in your trust deed payment. If your income decreases significantly there might be consequences for the viability of your trust deed, especially so early in the arrangement.

I would encourage you to discuss your potential plans, and any possible consequences, directly with your trustee.

Qualified Debt Adviser & Forum Administrator - Ask me anything about Trust Deeds    
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RMMT1
New Member

3 Posts

Posted - 13 August 2021 :  16:32:06  Show Profile  Reply with Quote
Hi TDA, thank you for your quick response.

Could my TD potentially fail if I couldn't prove I was earning enough in September and beyond?

And, I have a question that is a sort of hypothetical situation for the future (I have read other topics on here so I think I know the rough answer already). If I were in a position in the future to pay off the TD (in full or paid more to pay back sooner), I know TD have their own fees + whatever is remaining + (I assume) interest too.

1) Is it possible to pay it off before the 4 years? Especially if I earned more and paid a bigger monthly amount which could clear it before 4 years is up.

2) How is the interest over time calculated and can I ask my TD at any time for a settlement figure to pay it off?

Thanks for your assistance so far.
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TDA (Debt Adviser)
Trust Deed Expert



13799 Posts

Posted - 13 August 2021 :  16:57:32  Show Profile  Reply with Quote
Hi RMMT1,

There is a risk of failure if you're unable to afford to make your payments, or if the payment you can afford to make is much less than what was originally agreed with your creditors.

The only way your trust deed can be completed before 4 years is if you pay the full debt you owed at the start of the trust deed, plus interest costs (which will increase over time) plus your trustee's fees and costs.

This total sum could be funded by monthly payments, lump sum payments, or a mixture of both.

If you believe you're in a position to end the trust deed early you can ask your trustee to confirm the amount required at that time. This figure will change over the course of time based upon your monthly payments, added interest, and incurred trustee fees.

I think at the moment though it would be best to focus on making sure you can navigate through the next few months and recommend you contact your trustee to discuss this subject.

Qualified Debt Adviser & Forum Administrator - Ask me anything about Trust Deeds    
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RMMT1
New Member

3 Posts

Posted - 13 August 2021 :  18:36:57  Show Profile  Reply with Quote
I will contact my trustee.

Thanks!
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DBHA21
Frequent Contributor

28 Posts

Posted - 13 August 2021 :  19:37:33  Show Profile  Reply with Quote
Hi RMMT1,

As a quick addition to what TDA has mentioned - you should definitely discuss your plans for self employment with your Trustee, as they could object to this. Theoretically a Trustee is in a precarious position if you're self employed and subsequently incur trading losses.

There is certainly nothing to stop you being employed by a new Ltd company (you could even set up your own Ltd company but need to make sure you adjust the model articles of association appropriately).

Technically a Trustee should not terminate (fail) your Trust Deed if you have a negative change in circumstances beyond your control, however as this is set out in guidance as a "should not" and not a "must not" some Trustees will fail and others will not. This early in a Trust Deed however is a bit different. For example, if your debts are less than 25k, you have no assets and are unemployed - expecting that to be for the foreseeable - they may view it in your best interest to terminate and allow you to apply for MAP
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