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Topic starter
23/09/2017 7:29 am
Hi All,
I’ve finally taken the plunge on several fronts in recent days and spoken to an advisor regarding my situation – this in itself has been a huge relief, but was a long time coming. This is also my first post on this forum after hanging around as a wallflower for almost a year and reading some of the hopeful, helpful and positive experiences that people are having, and also looking at the very relevant points and questions that are raised. Almost all of the responses and advice by the advisors seems invaluable.
This may well be a long message since I have several issues praying on my mind, and I’m writing this at 2am! I’m still struggling to make some sense of how things ended up at this point given there are two pretty decent salaries coming into my household (totalling £60k) with no dependants! I don’t often have sleepless nights like this, and have amazingly managed to ‘live with’ the fact that there are horrendous debts. My conscience about certain aspects of the current situation is not clear at all.
Firstly, I do feel an enormous sense of guilt at proposing to let down my creditors by not paying what I, or rather we (myself and partner) owe – this totals just under £65k in unsecured debt. I’m trying to offset this feeling by rationalising to myself that no one individual person is being hurt by our potential action – we haven’t quite yet finally signed up to the trust deed, but I’ve known for many months that our situation is not sustainable and this is the most reasonable solution. My thinking is that our irresponsibility will impact on others by increased interest rates, but in the whole economic scale of things, I realise now that there are countless people in a similar position to ourselves.
It’s taken years and years to accumulate this level of debt, and I’ve thought myself extremely ‘clever’ and creative by consolidating (fairly frequently) and bouncing substantial amounts between 0% and low interest rate credit card transfer offers – nine active cards are currently on the go! Surprisingly, up to this point we’ve not missed a payment for anything at all, but the total outgoings for the £65k debt are now in excess of £1400 per month.
I was relieved to hear from the advisor that we’re not likely to lose our home – we have around 10% equity in a very modest one bedroom flat which we bought this year. This is our first purchased home together having rented for years, and I was stunned when a mortgage offer was actually made 8 months ago, given our financial circumstances even then. They are much worse now! Our property was purchased for £65k and is in pretty good all-round condition. So that’s a relief.
I have a few further concerns which I was hoping someone may gave their insight to.
Firstly in relation to transport, namely our cars. This is a huge concern, but not as big as our home, of course. My partner has a small car which is now 5 months old costing us £350 per month – a high figure due to negative equity carried over from previous vehicles since we extravagantly upgraded early – again and again! It’s a PCP arrangement with Fiat Finance over 4 years. The car is needed for getting to and from work due to a 5am start.
My own transport situation had been the possession of a company lease vehicle (through my employer) until recently – it was deducted at source from my salary. I had been in a job deemed an essential car user but am now predominantly office based, so have recently lost this vehicle. I therefore went to along to Arnold Clark and have just this week entered into a PCH, personal contract hire (different to PCP, I believe) for 48 months at a cost of £290 monthly – extravagant again, I know. I also need transport to get to and from work for a 50 mile round trip, but also during the working day for moving around sites (but not to the same extent that I used to). I’m not yet sure who the finance agreement is with, but the car is a Kia.
So that’s a total of £650 a month for two vehicles – is this considered reasonable? Many people would call this amount excessive, and I would fully appreciate that! I’m hopeful that we’d get to keep these for the term of the agreements, and am reassured that there would not likely be much in the way of unforeseen maintenance costs over the next four years of a protected trust deed given they’re both new. Indeed, the car situation, and the constant changing and paying early penalties has been responsible for a large percentage of our total debt!
As many of you may relate to, it’s been a real struggle keeping up with minimum payments to nine active cards and also the loans and HP as well. I was actually feeling positive that, when speaking to the advisor, there was suggestion that £400 per month would be reasonable for groceries – we’ve been trying to limit this to £200 (often unsuccessfully) for the last couple of years! Even just on that front, we’re going to be better off potentially! How crazy is that – we’ve totally luxuriated in so many things that we struggle to budget for basic essentials?
Please don’t get me wrong, I’m not anticipating that it will be easy for the next 48 months (and beyond), but it’s far from easy right now. Finances are constantly on my mind – checking balances, moving things around, trying to budget for some ‘basics’ while there’s been total indulgence in other areas over the years!
I am however anxious about the future, and unforeseen costs arising for unexpected house repairs or maintenance, unknown vet costs, dentist visits and what if something needs replacing, for example? This scares me, but at age 48 I believe I must finally take responsibility and try to learn to manage my finances – I’ve NEVER been able to do this, and ironically was brought up in a household where my parents saved up for something if they wanted it, without question!
My final thought is another of guilt at considering taking on even further debt before I sign up for the trust deed – however I can’t shift these thoughts, and morally they don’t sit well with me. What I mean is that I still have an amount available to me via credit cards, and although I’m by no means intending to ‘max’ this out, I keep thinking ‘get a new (whatever) right now, in case the current one doesn’t last four years’! I’m talking really about a new mattress and some minor brickwork repairs to an outside wall of my house which will need attention, and potentially a new phone since the current is unlikely to last the term! Is this awful, or have other people thought similarly before the point of signing up?
Really, for the advisors, will we indeed keep our home and transport? And also, after all ‘essential’ outgoings are accounted for how much is paid to the trustee – we haven’t quite reached that point of the discussion yet. Please – I’m not looking for a figure from you, but a notion of how it’s worked out. My (fairly accurate) figures say there’s a monthly income of £3400 and outgoings (including all the essential and groceries, fuel, utilities etc) of £2500.
Thanks very much in advance for any response, and to those for reading – it’s been another relief putting some of this down.
Mr.Hopeful
23/09/2017 8:32 am
Hi Mr. Hopeful and welcome to the forum.
Opening up, talking about your financial position and reaching out for help and advice can often be the hardest step to take but once you take this step I’m sure you felt a whole lot better.
Have you spoken to the company / advisor about all of this and how you are feeling?
The most important part when it comes to dealing with your debts is to pick a company which can effectively and efficiently deal with your debts and ensure that your Trust Deed runs smoothly and without any problems. You also want to ensure that the advisor you are dealing with is qualified and able to answer all of your questions and put your mind at ease. If you have been lurking on the forum you will have seen a recent post by Kevin the other Expert on the forum regarding the performance of companies who administer Trust Deeds.
A good knowledgable advisor should ideally meet with you both face to face and go over absolutely everything with you in detail which should reassure you. The advisor you deal with should ideally be the same advisor that will handle your Trust Deed from start to finish. I always tend to build a bit of a relationship with my clients over the 4 years which helps if they encounter any problems such as a change in circumstances etc.
The income and expenditure is one of the most important parts to your Trust Deeds as payments which are agreed by you both need to be affordable and sustainable for you but also a payment which the creditors will be happy with. There are guideline expenditure figures that we work with as advisors and as long as your expenditure doesn’t exceed these then there should be no problems. The payment which you pay per month is the surplus amount you have left over after paying all of your bills and therefore the income and expenditure needs to be very thorough to ensure that nothing has been missed. This is where it’s key to deal with an experienced and qualified advisor. It’s hard for me to really say what payments you would both pay without going over your income and expenditure with you.
To confirm that there is no real risk to your property a qualified advisor should carry out a valuation of your property and you will need to obtain a settlement figure for your mortgage. As long as the equity is minimal then there wouldn’t be any real risk to your property. It’s key to ensure that this is done up front and before you sign anything and for it to be all confirmed in writing.
Both car payments are on the expensive side but in my experience are not something that should create a problem for your Trust Deeds providing that the overall travel costs (insurance, tax, fuel costs etc) don’t exceed the maximum spending figures. One thing you need to be mindful of is that within the terms and conditions of your finance agreements there will be a clause about the cars being recovered by the lenders if you enter into a Trust Deed, Sequestration or an arrangement with your creditors. In my experience it’s rare for a lender to terminate the agreement but it’s something that a good knowledgable expert should bring to your attention and explain to you.
Further spending on credit cards to purchase items isn’t something I would recommend. Your effectively spending money which you are not going to repay in full. It could also be a factor in which a lender decides to object to your Trust Deed because of this. A good Expert will provide you with a budget that should be flexible enough that in the event something and up that you were not financially prepared for you could work around this.
Of your £65,000, who are the main companies that you owe the biggest balances to? If a lender has 1/3 of your debt they can object and potentially stop the Trust Deed from becoming Protected. Companies such as Barclaycard, Nationwide, Hitachi Finace can sometimes be problematic to deal with.
What about the jobs that you both do, will entering into a Trust Deed be something which could impact them?
Also, depending on your budget and the payment which you both need to pay, a Debt Arrangement Scheme could also be an option. Has this been discussed?
The most important thing to do is a little research on your options, also the company and even the advisor that you will be dealing with and then make sure that everything such as payments, how your assets will be dealt with and how any potential bonuses or overtime will be treated. There is also no harm in seeking a second opinion on your options and Kevin or I the two Experts on the forum would be happy to help with this. If you do all that then your Trust Deed should run smoothly and without any problems.
I’ve just realised how long my response is...sorry about that. I think responding whilst at breakfast with my kids this morning has helped me to switch off from them bickering for 10 minutes!
David is not currently posting in the Trust-Deed.co.uk forum
Topic starter
23/09/2017 8:49 am
Hi David,
Many thanks for your response. In fact, before I had even posted my original piece, I did in fact fill in a contact request form for yourself.
Hopefully I'll hear from you soon.
... And yes, one of the debts is £24K outstanding to Tesco bank, which would be around 43% of the total debt which is in my name. A potential problem?
Much obliged.
Mr.H
Mr.Hopeful
23/09/2017 9:14 am
Hi again Mr. Hopeful,
Tesco I’m my experience are always good to deal with and as long as a Trust Deed proposal meets their criteria they shouldn’t object so I’m not too concerned about them.
Thanks for submitting a request to me. I’ll pick this up and be in touch and we can go from there.
Try not to over think things or worry too much. The positive is that you have reached out for some advice and you have solutions to help you deal with your debts, it’s just a case of taking our time and working out which one best suits your circumstances.
David is not currently posting in the Trust-Deed.co.uk forum
Topic starter
23/09/2017 9:42 am
Thanks David,
Look forward to hearing from you at some point.
Mr.Hopeful
02/10/2017 1:52 pm
Dont do it ( no disrespect to david who really does go out of his way to help) find another solution if you can. Remember this is business to these guys.
02/10/2017 4:04 pm
Hi silly,
The business is really matching the right solution to the needs and circumstances of a client.
Do you regret your own decision?
Qualified Debt Adviser & Forum Administrator - Ask me anything about Trust Deeds 
03/10/2017 11:21 am
Hi
Unfortunately I do regret my decision but I am signed up now so I guess there is not a lot I can do about it. This is no reflection on the advisors on here however but yes it is a regret for me.
03/10/2017 11:34 am
Is there a particular reason you regret it, Silly?
Scottish Debt Solutions Expert - Ask me for help setting up a Scottish Trust Deed or Debt Arrangement Scheme plan.
03/10/2017 1:17 pm
Hi
Yes unfortunately I really struggle from one month to the next and feel my life is not my own anymore. I fully appreciate and accept responsibility for having got myself in the situation in the first place but this just feels like an uphill struggle and I dread to think how I will survive until its over.
03/10/2017 5:27 pm
That is a shame silly.
From years of experience reading people's posts on this forum I know that it can be really difficult for some people to adjust to a more restricted budget.
I hope that it becomes easier over time and that you consider the restrictions to have been worthwhile when you put all of this behind you in the future.
Qualified Debt Adviser & Forum Administrator - Ask me anything about Trust Deeds
03/10/2017 7:06 pm
Presumably the alternatives for you would also have been very difficult though. Paying debts off in full can often be a very long process and I guess your budget would have been restricted to a large degree but for much longer.
I too hope that it gets easier and hopefully before you know it you will be free of debt and feeling glad you took the plunge.
Scottish Debt Solutions Expert - Ask me for help setting up a Scottish Trust Deed or Debt Arrangement Scheme plan.
Topic starter
05/10/2017 9:33 am
Hi silly,
I appreciate your input, however after reviewing my own circumstances I signed my paperwork a few days ago for a Trust Deed since my financial situation has become unmanageable - limbering on from month to month, borrowing from one account to pay another, and budgeting which theoretically seems possible on paper, but just isn't achievable. Then there's the thought of the years ahead stretching out in front with this relentless battle!
I've dealt with David in different circumstances before and feel reassured that I'm doing what's right for me. I'm not yet able to breathe a complete sigh of relief since the process has only started and there are some hurdles to overcome, but I remain hopeful that the solution will be in the form of a TD.
I am expecting an unsettling time over the next few weeks whilst we wait on agreement (hopefully), and whilst my creditors try to contact me! However I've been proactive and informed some already of my position - again, there is some relief in doing that. I've never been one for hiding and hoping things 'will go away' - financially, they never do! Creditors will always chase their money, and that is to be expected.
I'll deal with my feelings about what I've done in an appropriate way, but have to set them aside at present in order to manage the practicalities - I can't (financially) afford to keep all the plates currently spinning! It's been exhausting.
I'm trying to remain positive that the process will go smoothly and everyone (or at least the majority) will agree, but that's what the advisers and experts are here for, and I'm willing to trust them.
Thanks again for your words - I value anyone who replies sharing their own experiences.
All the best.
Mr.Hopeful
06/10/2017 11:18 pm
Hi Mr Hopeful
I wish you well in your decision and I am sure it will all go through for you, after all these guts know what they are doing and wouldnt put this forward if they did not believe it would be accepted. As TDA has, quite correctly, said the period of adjustment can be tough and for me thus is certainly true. Prior to being in this situation, which I ashamedly found myself in in a fairly short space of time, I was relatively comfortable so yes it is a struggle for me. Like yourself I also dealt with David and he was mist helpful, I cant emphasise enough my comment is no reflection on anyone on here, David gave me a gery sound piece of advice at the outset. Anyway I hope your adjustment period, whilst it will be tough I am sure, goes smoothly.
22/10/2017 1:59 am
Excuse my spelling in previous comment, should really wear my glasses!! Anyway one example of why i said find another solution if you can - my house insurance is due, normally I would pay annual premium and get done with it but given present circumstances thought I would opt for monthly installments but eh that would be credit agreement so a no go. Ok so there is the fuel bill just been sent to me. So do i pay these 2 hefty bills and starve for the month or do I feed myself and get into more trouble. Is there any leeway in td payments? David maybe you can answer this? Whilst TD obviously helps with creditors it doesn't with day to day living and I am not sure the consequences of TD are explained fully.
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