You SHOULD NOT be paying setup fees on your Trust Deed

When you’re desperate for help with an unmanageable debt, fear can make you vulnerable to unethical practices that you would ordinarily spot and avoid like the plague. One of these unethical practices is Trust Deed set up fees.

There are many very good ethical Trust Deed companies, like the ones we recommend, but unfortunately there are just as many unscrupulous Trust Deed companies that you need to be wary of. Whether they charge set up fees or not is usually a good indicator of which one is which.

You should not be paying to set up your Trust Deed in any way. We only recommend companies that DO NOT charge setup fees. To help you sort the good from the bad, here are some of the tactics unethical companies will use to try and extract money from you while you investigate the option of having a Trust Deed.

1. Charging you a 'booking fee'

You ring up to get some advice and book a meeting with a Trust Deed practitioner, only to be told you have to pay a booking fee in advance. Don’t be fooled. Refuse to pay for what should be free advice and find another company instead.

2. Telling you fees are standard practice

The Trust Deed company will tell you up front there is a fee for their service and that it is quite normal to have to pay a fee beforehand. This is untrue. You are in debt and you should not have to go further in debt by paying set up fees for something you can obtain for free from other ethical Trust Deed companies.

3. Hiding the set up fees in the small print

You may not be told about any set up fees until an application pack arrives and hidden in the small print is a clause referring to the first few payments being diverted to the Trust Deed company as fees. This means payments towards your Trust Deed will be delayed for two to three months while the Trust Deed company helps itself to your payments.

4. Selling you a ‘debt management plan’ first

Don’t be persuaded to embark on a debt management plan (DMP) for six months which will lead you into a Trust Deed, even if the company does claim that its DMP could help you avoid taking out a Trust Deed. What the DMP will do is allow the company to take a couple of ‘fee payments’ from you upfront and then charge you a percentage of your contribution every month for the duration of the DMP, usually six months. 

5. Paying for a survey

Part of the process for applying for a Trust Deed is having a survey done on any property you own to check how much equity is available for release. This should not cost you anything, but some companies will still try it on and charge you equity survey fees.

6. Paying for an ad in the Edinburgh Gazette

When you are setting up a Trust Deed, a notice is placed in the Edinburgh Gazette advising creditors about what is happening and inviting them to contact your Insolvency Practitioner if they have any queries. Some unethical companies will try and charge you for this advertisement. They shouldn’t.

7. “Double glazing” Trust Deeds

It’s becoming more prevalent for debt management companies to send high-pressure salesman to your home to sell you a Trust Deed laden with fees and charges. Like double glazing salesman, these people don’t like to leave your house until they’ve got you to sign on the dotted line - which usually leaves you considerably poorer and no closer to getting rid of your debts.

Obviously there are fees involved with a Trust Deed, but these come later and do not affect the timescales it will take to get you out of debt. A small amount of your monthly payment to creditors is taken by your Insolvency Practitioner to cover the time and costs of administration of your Trust Deed and ongoing monthly management. This is perfectly normal and has been agreed by your creditors beforehand. What is not normal is companies trying to get extra cash from you before the Trust Deed is set up when you have very little income and are coping with an awful lot of stress and worry.

Be wise to their tactics and don’t let them get away with it! For more advice on Trust Deeds give us a call free on 0800 043 2027 or see if you qualify with our Free Online Calculator.