What if I can't pay my Protected Trust Deed payment?
It's not unusual for people to experience payment difficulties during their Protected Trust Deed.
Life has a habit of changing all around us. Sometimes the changes are insignificant and other times they're devastating. All we can do is try to navigate our way around as best as we can whilst trying to avoid the pitfalls that are all around us.
When Problems Strike
The first thing to remember is not to panic.
There are several option available your Trustee in the event that you're struggling to afford your trust deed payments, but which option the Trustee will choose will be determined by the nature of the problem.
Short term problems
If you're experiencing short term problems, such as a temporary drop in income, or an unexpected short term increase in your expenditure, then you should notify your Trustee straight away.
Your Trustee has the discretion to be able to reduce your payments whilst you're struggling to make ends meet. Once the problem has passed, you'll be expected to increase your payments back to the previously agreed level.
Longer term problems
Problems like this would typically be experienced as a result of the higher costs associated with the arrival of a new baby, or as a result of a permanent drop in income, perhaps as a result of an overtime block.
In any event, your trustee can, at their sole discretion, reduce your trust deed payment permanently for the remaining duration of your trust deed.
Depending on the size of the drop you've experienced, it may be necessary for your Trustee to extend the term of your trust deed slightly, but your Trustee will consider this as part of his remedy.
complete loss of affordability
In the event you suffer a complete loss of affordability, you'll need to discuss your options with your Trustee.
Obviously, your circumstances will have a significant bearing on the solutions they may suggest, but it is possible they may suspend the trust deed payments for the remainder of the arrangement.
Failure of your trust deed
In the event that you can't make any further payments to your trust deed and when the prospect of you being able to do so in the near future are bleak, it is possible the Trust deed will fail.
At the point of failure, you will once again be responsible for your debt liabilities.
The outstanding balances will be adjusted to reflect the amount you repaid during your time in the trust deed, but this may not amount to much as, usually, a sizeable amount of the initial money paid in to a trust deed is drawn by the Trustee to cover their fees.
Once you are back in control of your debt, you have a choice. You can try to negotiate with your creditors to give you some leeway whilst you try to reestablish a means of payment or, alternatively, you could opt for bankruptcy.
If you're experiencing payment troubles during your Protected Trust Deed you should immediately inform your Trustee.
They have the discretion to reduce your trust deed payments or even suspend them, if there's a reasonable prospect of you recovering your situation.
They will be able to offer advice to you so as to ensure your trust deed has the best change of surviving intact.