How much does a Trust Deed cost?
The Trust Deed cost is based on how much money you can reasonably afford to offer to your creditors each month. This figure is calculated by subtracting your monthly priority debt payments and essential living costs from your monthly income.
If you’re a homeowner and your home is worth more than any debts secured against it, such as your mortgage, then you may also be required to release some of the equity in it, but only if you can afford to remortgage at the time.
The Trustee is paid for all of the work undertaken to set up and administer your Trust Deed, but this is included in your monthly payments. You are not expected to find additional money to cover the Trust Deed cost, the amount you can afford to repay each month (plus any equity release, if this applies to your situation) is the only amount you’ll ever be asked to pay and is shared between your creditors and the Trustee.
The only exceptions to this are if you receive a significant windfall during your Trust Deed (such as winning the lottery) or your house appreciates in value to the extent that you are able to pay back your debts in full. In these circumstances, you would be liable to pay a fee to your Trustee in addition to the creditor payments, however, the Trust Deed cost should be clearly set-out by your Trustee before you commit to the arrangement.
Debt Advice Foundation is a registered UK charity offering free, confidential debt advice. If you need advice about Trust Deeds or would like to see if you qualify, please call the charity’s helpline to speak with a Advisor on 0800 043 40 50.