Hi kendoddsdad

Oops! pressed send too early!

Are the debts all in your name? and is the property just in your name

Hi Mark

Thanks for the reply. The debts are all in my name, but the house is jointly owned with my wife. She is on the deeds and a joint mortgage.

Hi kendoddsdad

On the face of it the Trust Deed is an option, however the endowment policy may complicate things.

On the face of it, the policy is assigned and can't be surrendered without the banks agreement. The option may be to remortgage to release the policy for creditors, however that could be interesting as there's a thing called Catholic & Secondary securities whereby the secured loan company can claim title to the policy if the mortgage is cleared. Even though they have no legal assignation. I assume the policy is jointly held also. Any idea of it's value?

Mark

The policy was one of 2. the other was cashed in around 2 years ago and the current policy is the smaller one worth about £7k. It is in both names.

Ken

Hi Ken

assuming the half value in the £3,500 region, i think its unlikely that the Trustee would seek to deal with the policy as described in my original post as the costs would outweigh the benefits.

An interesting one though.

Mark

Hi Kendoddsdad

Based on the information that you have provided I don't believe the endowment policy will cause you an issue, due to it's value. The main thing to check is that it is definitely assigned, as if it wasn't your share would require to be realised.

Worst case scenario you would maybe have to pay in the region of £2,612 towards your Trust Deed. How I've worked that out is £160,000 + £7,000 less £120,000 less £41,775 = £5,225 divided by 2 = £2,612.50.

Each case is looked at individually however our firm, and probably quite a few others, normally provide an allowance for potential selling costs, within a Trust Deed to reflect the position to creditors if we were forced to sell a property due to non-compliance on behalf of an individual in a Trust Deed. The chances are you wouldn't be required to pay any sums towards your Trust Deed in respect of the 'equity' in your property, once the above had been taken into account. This is obviously fully dependent on the valuations and redemption figures obtained.

Julie

Quite often endowment policies are not assigned to mortgages these days. If not then it is likely that the policy would need to be cashed in and your half share paid to the creditors. Given the fairly low value then I imagine you would be prepared to do this if it means your debts can be cleared within a three-year trust deed.

In terms of other options, you may be able to set up a payment arrangement such as a DAS, where the interest would be frozen on your debts. However, you would need to pay back the debts in full, which could take a long long time based on what you can currently afford.

A trust deed certainly looks like a good route for you based on the information provided, kendoddsdad