Hello jack54 and welcome to the forum.

I understand that Kevin, Julie and Mark have recently been attending meetings and seminars as to exactly how these very new protected trust deed rules will work so it will be good to get their input on this when they next check into the forum.

My understanding however is that if you have substantial equity in your home currently it will still need to be dealt with one way or another. One such means, as you describe, is to extend the term of the trust deed beyond the normal 36 months to deal with the equity.

Do you consider the monthly amount of ?ú1425 to be manageable? How much equity is there in your house at the moment do you think?

Hello jack54,

In a way it is stillto be seen how the new rules regarding equity will pan out in practice. However, any trust deed where the equity in a property is not forming part of the proposal still needs to be accepted by creditors. I envisage that if there is significant equity being ignored then creditors are likely to object to the trust deed.

Therefore this change is really going to be of most use to people who have some equity in their property but not very much. Those with a higher amount are probably still going to have to find a way to realise some equity - most commonly by extending the term as you describe.

It sounds as though it is at least worth exploring your options in more detail with an insolvency professional.

Thanks TDA, We could afford the ?ú1425 at a push, but it makes no allowance for any emergencies, breakdowns etc. It also assumes that I will continue with the same amount of overtime etc.
Our total unsecured debt is about ?ú100k.(including ?ú30 with a NR together mortgage)
The equity in our house is difficult one. The outstanding mortgage is ?ú150k and we have a secured loan which I think stands at about ?ú30k(though I'd need to check on the early settlement value)The house value is the hard one with all the fluctuations in the housing market. 2-3 YEARS ago I'd have reckoned to get ?ú220k if we'd held out for the best offer. From reading the forum in the past, the valuation on entering a trust deed can be priced for a quick sale and the same at the end of the trust deed.
We have two kids at University at the moment and this has really brought things to a head, what with the various course expenses etc.
My wife and I both work fulltime. She takes home ?ú1280 per month and I average ?ú3500 per month although this fluctauates each month depending on how much overtime/call-out payments I get.

Hi jack54,

There should be some allowances made to cover car maintenance, sundries, emergencies etc etc. This would apply whether you were looking at a debt management plan, trust deed or any other debt solution.

Overtime and bonus payments would normally not be included in the regular monthly payments unless they are guaranteed. You mention that your income fluctuates so I'd assume they're not guaranteed? Where they are not guaranteed there is obviously a high failure risk for the debt solution should the additional payments cease.

With potentially higher expenses and potentially lower income figures used the term of a debt management plan may well be longer than the period proposed by Payplan.

I'm curious as to whether Payplan mentioned the Debt Arrangement Scheme to you? Like a DMP you would have to pay back all of the debts, but unlike a DMP your home would be protected from creditor recovery action and you would be guaranteed that interest would stop on your debts.

See the following link for information about some of the limitations of debt management plans in comparison to DAS:

https://www.trust-deed.co.uk/debt-management-plan.html

In a protected trust deed you would normally agree with the trust deed company a percentage of additional earnings such as those which you mention that would be paid into the trust deed. That would give you an incentive to continue to earn as much as possible which would be of benefit to both your creditors and yourself throughout the trust deed.

You're certainly correct that it's hard to put a value on a house at the moment. The valuations used for the purposes of a trust deed would normally be lower than those that might be provided by an estate agent looking to win your business. Looking at the figures and dates that you have provided in connection to your home it does appear that the equity may not be especially high though of course this could only be confirmed via a formal valuation.

The value of the equity in your home may also be calculated at the start of the trust deed and the equity amount fixed at this point. This would negate the need for a further valuation and possible changes at the end of the trust deed. Many trust deed companies, including those featured on this site, are prepared to put proposals forward to creditors on this basis and provide you with written confirmation that the equity figure will not be revisited after the three years are up.

Thanks TDA for your help. It certainly seems that I should consider a Trust Deed. I will arrange a meeting with one of your contributors.
Payplan didn't mention the DAS.