Welcome to the forum Flower

A lot of good questions there, I'll try and answer them all in turn.

It depends on how much you can afford to pay towards your debts each month, but you may well be in a position to choose between a debt management plan or a trust deed. Either are appropriate ways of resolving an unaffordable debt situation. Judging from the information about your house there would seem to be very little equity so should not be a problem in a trust deed.

The choice of which to go for often comes down to how long it would take to repay the debts through debt management. If it is significantly longer than the 3-year trust deed then that may sway your decision. However, if the debts can be cleared in full within a reasonable period of time then a trust deed isn't really necessary.

In terms of fees, you shouldn't have to pay any fees up front to set up a trust deed, the insolvency practitioners costs are paid out of your monthly contributions, which are based purely on affordability.

For debt management you have a choice between going to a debt management company, who are likely to take a monthly fee and/or an up-front fee from you for negotiating with and paying to your creditors, or going to a free money advice service, such as a CAB. The advantage of paying a company is that they will normally distribute your payments for you each month, rather than you having to make arrangements to pay each creditor individually. They may also be able to set up arrangements more quickly as I believe many of the fee-free services are very busy and there may be a wait before you can get an appointment with a money specialist - though I don't know whether that is the case in your area.

In terms of who you can trust, well I am of course biased but in terms of trust deeds would not hesitate to recommend any of the firms for which myself and the other experts on this forum work. If you would like any of us to examine your circumstances more closely and give you some individual advice then please do contact one of us through the links on this site.

Finally, if you are up to date with your payments then I would imagine you should have no problem getting an account opened at any bank. All I would say is to avoid any bank that you owe money to in some form.

Hope this helps

Kevin

Thanks for this Kevin, i would like for you to have a closer look at my case and i will make contact soon. The company who suggested i should do a trust deed are asking for an "initial" ?ú300 set up fee but then say that the ?ú200 i would pay monthly thereafter would all go to my creditors...is this normal?

One other question i have is: If i opted for the trust deed, and by the end of the three year period i decide to sell my house, providing the housing market has recovered enough, would any profit made on the house sale be taken from me and given to the trust deed?

Some debt management companies do expect an up-front fee from you for referring you to an insolvency practitioner. There is no reason why you cannot go directly to an IP without paying such a fee, and there are also debt management companies who will not seek such a fee from you, so I would suggest that paying this is an unnecessary waste.

On your second question - once the trust deed has ended and you are discharged then you can do what you like with the property and any profit would be yours to keep.

Hi again, i noticed on the forum today that if one of your creditors loans is less than 1 year old then they would not look favourably on agreeing to a trust deed. My own situation is that one of the loans i have is for 7.5k with Lloyds TSB and i only started it in March 2009. What would be your advice given this situation? it seems that everywhere i turn it just wont work out. Would it be better to go with a DMP in this case?

Hi Flower

I have found this to be an issue with Black Horse and Santander, but not with other creditors.

Kevin, have you had a problem with loans less than a year?

Mark

Hello Flower,

Both Kevin and Mark deal with all the major creditors on a very frequent basis. If neither of them express a particular concern about the Lloyds TSB loan I think you can proceed with a degree of confidence.

Yes, Black Horse and Santander are the only creditors that spring to mind. I don't recall ever having a problem with Lloyds TSB.

Often with Santander their loan may have been for a car so they are understandably very keen to ensure that the full value of the car is realised for creditors.

Hi,

I'm still so confused and still looking for advice before i make a decision about how to tackle my debt problem and wonder if anyone can offer advice about Creditors refusing to accept a TD if some of the debt has been accumulated through on line gambling? The card has now been destroyed and the gambling account closed!

Thing is, i spoke to Payplan recently who tell me that i would not be accepted into a trust deed because of this...is that true?

Many thanks again!

Hi Flower

I don't think the gambling side is an issue. I have a recent case with bigger debts than yourself and this went through with no issues whatsoever.

Mark

My understanding Flower is that where an individual has taken proactive steps to deal with gambling that is leading to debt there is no reason why a Trust Deed shouldn't be accepted.

Certainly your having closed the online account is a major positive step.

Online gambling is a factor in causing debt for many people since it became so available and I've seen many cases where it has not affected a debt solution being accepted by creditors.

quote:

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Originally posted by Flower

Hi, I have just joined the forum and read through many of the posts, it's very informative and helpful!
My own situation is that i have 15k worth of unsecured debt through loans and credit cards. I own my flat, there is 97k owed on the mortgage, but i face hefty redemtion charges until April 2011 if i sell early! The property is valued at around 110k, but i also have a secured loan on the property of 7.5k with 5 of seven years still to run.

I have not defaulted on anything....yet, but i cant go on like this. My health is beginning to suffer from all the worrying, so i must do something to improve the situation, and quickly!

I have been in touch with a few companies who have advised me to go on a debt management plan, but one also suggested i should take out a trust deed.

My questions are: I do not know who to trust anymore! What are the fees one would expect to pay have either of these things set up? which one is more advisable? which company can i trust to ensure the majority of the money i give them actually reaches my creditors? and which bank would you reccommend i set up a new account with and who would actually accept my application given my current circumstance?

Many thanks in advance for your help!

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Hi Flower

It is difficult to be precise without a full income/expenditure etc.

However general advice would be:

1. Only look at a Debt Management Plan if creditors are guaranteed to freeze interest and the debt can be repaid over a realistic period. But beware of excessive up front fees.

2. If a Trust Deed is the option, there should be NO upfront fees. This should be simply 36 x whatever contribution is paid.

Mark