Hi k13vnr1981

The advice given over the phone is nonsense and sound like the usual sales advice.

It is difficult to assess any level of contribution accurately without having all of the figures as there are a number of moving parts in this. The calculation should allow for your wife's costs for debts and contribution towards household expenses.

The best advice I can give is to organise a meeting with someone ( not a middleman) and run through the income and expenditure to calculate the level of contribution. This will also allow you to discuss the position with the car, debts etc.

Mark

Hello k13vnr1981.

The advisor you spoke to regarding the car either has got the wrong end of the stick, doesn't know what they're talking about, or was spinning you a line to try to sell you something.

The threshold with vehicles is £3,000. A car (that you reasonably need) worth less than this would not be taken into account. If it's worth more than this then it will be an asset that one way or another needs to be taken account of.

Try to see the disposable income issue from the perspective of your creditors. Let's use your figures - an £800 joint disposable income after all of your household costs are taken into account. You're saying that as your wife earns more that might be split £500 for her and £300 for you.

All of your household bills and necessary expenditure have been taken into account. As a couple all of the money that you need to be able to live reasonably has been ring-fenced.

There is £800 left after that which you could spend in a discretionary way if neither of you have debts. As it stands however, each of you has debts to service.

If your trust deed payment is set substantially below £300 you're effectively asking your creditors to pay for your wife to pay her debts and to have more disposable income. They're not getting their fair share of the joint disposable income - it's being used instead to service your wife's debts and to increase the amount that she (or you both) can spend in a discretionary way.

What's the main issue with this for you? If your creditors don't think that they're being treated fairly they're unlikely to allow your trust deed to become protected. So the option may effectively become unavailable to you.

Could you recommend anyone so I know my true options. Also will sitting down with someone do anything with my creditors as I may want to just not do a trust deed and find another option through parents with a loan?

The main issue is that these are my debts not my wife's so why is she being punished if it's my fault and my debt?

No, it is only to look at options. Beware of anyone who looks at only one option as you should always make the final decision.

Any meeting will have no effect on creditors and will leave you free to decide which option best suits your own circumstances, wether this is a formal route or via a loan as you say.

Mark

Hi k13vnr1981.

This site recommends the companies represented here in the forum by Mark, Kevin and David. You can reach out to them via the contact buttons in their forum signatures. We're not saying that they're the only good firms out there, we are saying that we have full confidence in them.

Your creditors will not be contacted unless you formally instruct someone to do that.

Hi K13vnr1981,

Wow, I can't believe that an advisor has told you that. I suspect they don't know what they are talking about and have no formal Insolvency experience.

As we have previously advised a car that is worth more than £3,000 is regarded as an asset and you will need to come to an arrangement with the Trustee on what will happen.

You effectively have a £10,000 car free of finance which in theory could be sold to try and repay more of your £50,000 of debts. If every car over £3,000 in value was sold then no one would want to enter into a Trust Deed as they would lose their vehicle and for most people a vehicle is essential. What normally happens is you will agree up front before anything is signed what the position is with the vehicle. Different firms deal with assets in a different way so it's best speaking with a couple of firms to see how this will impact your vehicle.

Best thing to do is sit down with an advisor either in their office or in your home, ask them about their level of experience, qualifications, make a list of questions and work through all of these with the advisor. By doing this you should be in a better position to understand how all of your options work. Also, have a look on the forum for feedback on different firms and also what other people have done.

It's about finding a balance k13vnr1981 between what your creditors are happy with and what works for your family. If that can happen then things should run pretty smoothly.

Mark is right about the car - it sounds like a middleman telling you what you want to hear. There's no way that a car bought for £10000 in cash 6 months ago could be ignored (though that isn't to say that you would have to give it up - there could be another arrangement whereby extra payments are paid in in order to keep it for example). Did you borrow the cash to buy it?

The whole issue of joint situations and apportioning of household costs and disposable income is a tricky area and one which the Accountant in Bankruptcy is grappling with at the moment while drafting new guidance to go along with the changes to bankruptcy legislation commencing on 1 April. It was a lively topic at a stakeholder meeting I went to the other day and we are expecting the guidance to be published in early February. Hopefully this will at least provide clarity on how the government expect these things to be calculated, though whether they can come up with a system that is fair in all circumstances is another matter!

Hi k13vnr1981

It is always about striking a balance. Creditors will only see the joint income as a way of supporting both joint expenses and your wife's obligations. The information they get is effectively agreed between you and the trustee before it goes to creditors.

Mark

When someone discusses their situation with an advisor, that advisor should take clients through the following:

Full and Final Settlement
Debt Arrangement Scheme
Debt Consolidation/Remortgage
Sequestration
Trust Deed
Budgeting and Financial restructure
Friends or Family Support

I see you are considering a loan via your parents for the funds to clear your debts. Something which could work out for you but at the same time you need to take into consideration the impact that this could have for your parents should anything change in your financial circumstances which would make it difficult to pay them back. Guarantor loans are popular and friends and family will sign up to help someone out but with anything in life things can change and the friend or family member can be left with the debt.

Like I said a good advisor should take you through the options, you can also discuss what you're thinking regarding your situation and then from doing that, the options that are the most suitable should be left on the table for you to consider.

It can all sound a little complicated and feel overwhelming especially when reading it on a forum but all of this can generally be clarified in around 1 hour with a meeting with a qualified advisor or even a phone call with someone that does know what they are talking about.

Is the 3000 figure based on the value after 48 months of payments???

I think the asset will probably need to be valued at the start k13vnr1981. Doing it any other way would create uncertainty and prevent the parties involved from ensuring that a workable plan was in place to deal with it.

Hi k13vnr1981

That's a good point and there may be variations on how a company will look at this. The key thing is that the Trust Deed is a proposal which is put in front of creditors to gain their acceptance. The position with the car would form part of that proposal. Sequestration is where creditors are advised of the position with no negotiation.

You will normally be allowed to retain the car if this is required for work purposes and therefore is required to work to allow you to earn income to pay the contribution. The options I have seen are to sell the car for a cheaper car and the balance is paid to the Trust Deed or the car is valued at the end of the Trust Deed on the basis that it is essential for work etc and allows for a contribution while minimising repair costs etc through the 48 month period. A car which has a value now of £3k I do not think will be a reliable car in year 2-3 etc. So there are a few factors to be taken into account and ultimately the position will be put before the creditors for their agreement. Don't worry, this is not as difficult as it sounds.

Mark

HI K13vnr1981,

As Mark has said there can be variations on how a vehicle will be treated from firm to firm which is why your best to speak with a couple of different firms.

Depending on a client's circumstances, value of vehicle and the requirements for the use of the vehicle my firm may consider the value of the vehicle at the end of the 48 month period and any value over and above the £3,000 threshold we will ask a client to extend their payments and pay this over. To do this, we will have an auctioneer/car seller value the car at the present date, they will also provide us with a projected value in 4 years' time. This isn't as hard as you would think. By doing this we are able to give an indication of what you could be asked to pay over for the value of the vehicle at the end of the 48 months. We will value the vehicle at the end of the 48 months and this is what we will use to calculate what you could be asked to pay over. You can pay this over by extending your payments.

If for example your car is worth £10,000 at the moment and based on average mileage and condition it's worth £5,000 at the end of the 48 month period, we will ask you to pay over £2,000 for the value of the vehicle. We confirm all of this up front in writing with you before you are tied into the Trust Deed.

The Trust Deed is effectively a proposal to creditors. We provide the creditors with an Outcome Statement in this scenario showing what they would receive in a Trust Deed if we allowed you to keep the car against what would happen in a Sequestration if we were to uplift and sell the vehicle. If creditors accept the proposal then they are comfortable and happy with it.

We have proposed a number of Trust Deed's to creditors on this basis and we haven't experienced a problem with creditors accepting that type of proposal or from the Accountant in Bankruptcy protected the Trust Deed.

I hope this helps to clarify things.

Thankyou everyone for your help it's much appreciated and very informative! Last thing is what I touched on before is do you think that the creditors will take issue with me transferring my wife's credit card balance 6 months ago to mines due to her interest free running out and me taking a card on to service it. When I say her credit card it is in her name but I used it until I could get my own and when I did I transferred balance to me as it was my spending that got the balance up? I'm just very worried about leaving my wife with hassle due to this!