Headwire - we have all faced some of the issues you are now having to address so you are amongst friends!

Having just completed my Protected Trust Deed, I'd have loved a family source to bail me out - if my folks were already aware/involved/offering to pay as are yours, that is the route I'd have gone down.

My monthly payments to the PTD were all set out before hand to me by my Insolvency Practitioner - then I could determine whather it was for me. And it was, the best financial decison I made in some 15 years!

My PTD made no difference to my wife's credit rating (and she knew all about my arrears/remedy etc) and it has had no impact on her financial status - and she still gets the calls for balance transfers from cc companies which amazingly I no longer get!

Good luck!

Hi Headwire

Welcome to the forum.

The trust deed should have no effect on your partner.

Re the contribution, this should be agreed and confirmed before doing anything.

I think you should look at alike alternatives before looking at the trust deed. That said, I've never believed borrowing other sums solves the problems. Best advice is sit down with someone, look at all the options available to you and then, in your own time, decide what's best for you.

Mark

Welcome headwire,

One of the main experts can advise you better to your first question i can only go by the experience i have had when comes to this. When i entered my trust deed i asked the same question and was told no it would not effect him or his credit rating upon marriage. I just had to make my TD aware i got married.

2nd question: Depending on which company you decide to seek advise from, they would have to take you through what income you are recieving, what you pay out on basic bills and so on and then advise you if a trust deed is a good option and they would then look a what was left out of your income and that would be what they believed you could afford to paying into your TD. It also may differ if you have assets (Ie: a car over the value of 3000 and a bought home and so on. You don't have to sign anything on your first meeting, have a long think over what you want to do. Also look at all the options out there so you can get the right one appropriate for your situation.

Question 3: You wont know if a trust deed is right for you until your sit down and speak to someone and go through everything. there maybe other alteranative out there more suited to your situation. That is a lovley gesture of your family willing to give you the money. My thoughts to you in regards to this is if you feel its the right thing to do then perhaps talk to your parents about this and how it would work (ie: payments and so on), however if you are uneasy at the thought then maybe you should continue to look at your options. I can understand you feeling reluctant for them to remortgage to pay off your situation and you have to be happy in yourself if it is the right thing to do. I think if i had that option i defently would have taken it but in saying that, its the age old situation never borrow to pay off debt and create a new one. Even though this is your parents offering you it i think i would feel awkward to owning them large amount of money if it was me.

Mark has made a very important point (as always!) which I overlooked. Borrowing from bank x to pay credit card y was my downfall and I am not alone in that regard. At least, with a loan from a family member, no interest will be added. But a PTD offers you the prospect of not having to payback the full sum you owe to creditors depending upon your circumstances.

My creditors agreed with my IP's assessment that I could replay just over a third owing in total: as she said to me, they would rather have 30% of something than 100% of nothing.

It's your name that will be at the bottom of the page that commits you to a 3 year PTD - so weigh up options, ask questions here, then decide. But there is no universal fix or "one size fits all" answer!

Hi Headwire, and welcome to the forum. I think a lot depends upon how much debt you have and how quickly you are likely to be able to repay your parents if you accept their offer of help.

Don't forget there are other options too, such as the Debt Arrangement Scheme which allows you to repay your debts whilst protected from your creditors and with all interest and charges stopped.

I would be tempted to maintain a good credit rating by borrowing the money from family if its on offer.

That said a trust deed or any formal insolvency is without doubt the best lesson you will ever get in money management.

Can you let us know,without too much detail how you got into debt? For us we just overspent and if someone just loaned us more money to pay our debts we would still be borrowing and living on credit so would not have bettered ourselves by learning to budget and control our spending.

Many options are open to you so get sound advice from more than one source and let us know what you decide to do.

Paul

A big thanks to everyone that posted a reply, it has definately given me a lot to think about. It's really good to know other peoples professional thoughts and also the thoughts of people already in a TD.

To plasticdaft, you asked how I got myself into debt. I worked in a job for around 7 years that I absolutley loved however the pay was terrible, over that time period I was spending more than I earned and just slowly mounted up the debt to the point where if I really needed anything i.e fix car etc it had to go on a card. Overtime I took on more cards, did balance tranfers and took out loans to consolidate. My main problem was that I never cut up my cards and just kept dipping into them. I gave up that job 4 years ago for a better paid one however the debt is still there and with my partner being unemployed for the past 4 months, it is just getting worse.

Just found out today that the re-mortgage option isnt looking good as my parents properties are all on one title deed and the bank won't allow a remortgage unless it has its own deed. No one seems to know if the deeds can be changed 🙁

Kevin, you mentioned a Debt Arrangement Scheme? Could you give me some more info on that?

Again thanks all for your help, it's very much appreciated and I'll keep you posted on everything.

Cheers 🙂

Personally, I wouldn't choose the ongoing debt to family.
The TD and Sequestration, generally seem to be a commitment to 3 years of affordable payments, the DAS can be much longer. Assuming your family lent you the entire amount, that could be a long commitment. Family dynamics and choices WILL be affected in ways you can't predict /imagine.
Let your family be your emotional support or cheerleaders (seems they are already v. willing to help)as opposed to them ending up with a share in your worry about ongoing payments. Life has a way of throwing curve balls for us to react to and I'm not sure a long term payment plan has any flexibility when illness/ death / relocation / marriage / divorce etc etc come along.

You need to think about why you need the trust deed and if you can trust yourself not to get into more problems. I ended up in the position I'm in because I used one card to pay another, withdrew cash on credit cards, got loans to pay cards but didn't ditch the cards, used credit card cheques to pay overdrafts - the list is endless. It's great your parents would offer to do this but you have to be completely sure you'll be able to pay them back. I'm so crap with money, I'd never have stuck to this and ended up at square one.

Other than the whole debt repayment thing, the trust deed has taught me to live within my means and to budget. Whatever route you go down, I hope it works out well.

Hi Headwire.

There is a fair bit more information about DAS here:

https://www.trust-deed.co.uk/debt-arrangement-scheme.html

I'd suggest having a read, if you have not already, and let us know any questions you have afterwards.

In terms of consolidating debt, as you might be able to do with your parents help, it's all about affordability. In a trust deed or DAS it will be worked out how much you can afford to pay towards your debts from income surplus to your reasonable needs. If you can consolidate you need to know whether the monthly repayment afterwards will be more or less than this affordable amount.

If it's less you have a viable option to consider. If it's more you will end up in deeper trouble and expose your parents to problems in the future as well.

Once again thank you all for your responses, I'm getting a bigger clearer picture of everything now 🙂

Gillian made a good point about trusting myself not to go back down the route of credit if I took my parents up on their offer. I suppose temptation would always be there, but I know in my heart that I would always keep up payments with my parents as it means so much that they are even offering this. It's just the possibility of the unexpected happening and me using the cards again.

I worked out it would take me roughly 10 years to pay them back at 250 a month, currently im paying roughly 650 a month to creditors for the next 6 years and because I have nothing left at the end of the month I'm still using the cards for essentials. I'm keen to protect my credit rating for a future mortgage but I don't know if I'm asking too much.

One other quick question in regards to PPI. I'm thinking of checking out if I'm due anything. Should I do it now before entering a TD or would that look cheeky to my creditors come the time I'm looking for a TD?

Again all your help has been amazing, sorry to keep bombarding you all with questions 🙂

Many Thanks

Hi Headwire

If you leave the ppi thing, then any funds would go to the trust deed should you proceed down this route.

However if you did this beforehand, you would need to explain what happened to any payout, which would not be ideal.

Hope this helps

Mark

If you are trying to pay off debts while still using credit to get through to payday you are on a hiding to nothing.

You need a proper solution,which will include cutting up your cards.

As regards to the ppi I would be tempted to discuss this at the same time as discussing a trust deed. Chances are if you tried to claim it just now anything you get back would be offset by any interest and charges. If claimed during a trust deed the money will be added to the pot for creditors.

Not sure about reclaiming ppi during a DAS,but you cannot carry on living on credit,thats what we did and the amount of debt will soon spiral.

Paul

I had to hand all my cards over when I signed my trust deed. Clearly they wouldn't have believed 'honest, I won't go spending the remains of the balance before tomorrow[;)]'.