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How Much Do Trust Deeds Cost?
Trust deed costs change from case to case and depend mainly on how much you can afford to pay your creditors each month. How much you will be expected to pay back each month is calculated by subtracting essential living costs from your wage; with usually what you have left being what you are expected to pay. There are other factors that will also be taken into account, such as whether your home has equity in it that can be used towards your debt. Whilst it is of course understood that you will ultimately be repaying less than what you owe, you will be expected to repay as much as you can each month; meaning there will be strict restrictions placed on you regarding your lifestyle during this period.
Will I pay the Same Amount Each Month?
Yes and no. Every year your financial situation will be reassessed. If your financial status has not changed you will continue to make the same repayments until you are assessed again the following year. However, if your financial situation has changed, for example your salary has been increased, the trust deed price may change and your repayments may rise. In addition, if your home increases in value or you are the beneficiary of a lump-sum of money you will be expected to offer further compensation to your creditors. Because of such factors, it is recommended that you ensure all fees, including those related to projected increases in property value, are clearly set out in your proposal before you agree terms.
Is a Trust Deed my best option?
Trust deeds are the best option for many as they are legally binding with your creditors and debt is usually cleared within 5-6 years. Assets can be kept and a payment structure is made that suits your situation. However a trust deed can be very strict and needs to be kept to. If it fails then there is a risk of bankruptcy. Certain professions can also be affected by insolvency, so check your contract of employment before going forward with a trust deed. Whether you’re accepted onto an trust deed or whether other options such as Debt Relief Orders (DRO) or Bankruptcy are better options, depends on certain criteria. Complete our quick online assessment to see which is best for you.Take our quick online test
Trust Deed Fees
If you are considering a trust deed, there are many different factors and costs to consider. Perhaps low down on your priority, the fees charged by trust deed providers can often seem insignificant. However, this is a common mistake and one that can lead to serious problems, including your creditors rejecting your offer because they believe the trustee is charging too much. The fees you pay are usually taken directly from the money you pay to your creditors, therefore, the more you pay the less you are paying off your debt. Furthermore, some providers may suggest shorter or longer repayment periods depending on what is best for them, not you. As such, it is always recommended that you shop around as much as possible to get information regarding the different fees and additional charges being offered. Ultimately, how much you look around and what you decide to do can have a large bearing on what trust deeds you choose and what they cost.