Hello equity but skint,

It isn't unusual for people to be in a position that their assets outweigh their unsecured debts.

Some people consider this to be a fortunate position as they can avoid serious measures such as Trust Deeds or bankruptcy via the sale of the asset and have a fresh start.

Other people feel trapped by the situation as their priority is to keep their current home.

A Trust Deed isn't going to be a viable option for you with equity twice your level of debt.
As you have commented on, working every hour of every day probably isn't going to be a long-term solution either; your health is more important.

Other options that might enable you to stay in your current home could include the Debt Arrangement Scheme or a Debt Management Plan though both would depend upon you being able to make regular monthly payments towards the debt (which may mean you still have to work long hours depending upon your circumstances).

These options can sometimes run for a very long period depending upon the balance between the overall debt level and the monthly payment amount. However for many people they do represent the best option in the circumstances.

I don't fancy a DMP because it would cost me to line the pockets of others. I'm researching this DAS thing at the moment while I'm waiting for a rep to arrive re a Trust Deed I am assured I can get which worries me as everyone says I can't due to the equity I have.

I'd be happy to pay all my debtors in full plus normal interest if they'd only let me get a fresh loan over 5 years or so.

Please don't pay over any kind of upfront fee to the visiting rep.

Even if you were, somehow, able to enter into a Trust Deed you are then going to have to pay over the full amount of the debt plus the fees of the Trust Deed company.

As you have stated that you cannot refinance the only means to do this would be to sell the house (or have it sold for you).

A debt management plan with an organisation such as CCCS would be without fees but would also be without legal protection from your creditors. DAS is a little more formal and less flexible but does provide legal protection.

Have you considered going to your Mortgage Company to discuss what options they would suggest.

Insolvencyboy, unfortunately that's not an option either.

Trust Deed Assistant,

I havenÔÇÖt paid any upfront fees as I requested it in writing that the fee would be returned if I was turned down.

From the IPÔÇÖs literature I see that the fees are taken from the monthly amount IÔÇÖd be paying so IÔÇÖll have to find out how much that would be. As for paying over the full amount of the debt, I donÔÇÖt care if I have to pay it all back as I owe the money anyway and just need reduced payments and longer to pay.

Re the equity, it says that the equity will be realised but in many cases without selling my home so IÔÇÖll have to find out how they propose to do this since I wonÔÇÖt get a remortgage due to the fact I originally borrowed under the old self cert situation and wonÔÇÖt be able to meet the criteria to borrow more than I will owe in three years time.

IÔÇÖve still to look into the DAS to see whatÔÇÖs involved but my head is bursting with all this Trust Deed stuff just now.

This is a minefield and by the time I get through it, IÔÇÖll have paid my debts and collapsed with the long hours!!!

The DAS process can be found on the Money Scotland website.

you have "equity twice the size of your debts".

Therefore you are not insolvent and therefore you should not really be considering a Trust Deed.

If you are unable to get a remortgage at the end of the Trust Deed, should you sign, you may be in a position that the Trustee is obliged to recover the asset on behalf of the creditors.

I would suggest you spend more time looking at DAS rather than continuing with any thoughts of a Trust Deed.

the DAS will mean that you pay back all the debts over a lengthy period, but it does offer a degree of protection from creditors taking further action against you and all interest is frozen as long as you complete the DAS process.

The processes - hypothetical scenario

Debts ?ú30K Equity ?ú60K Disposable Income ?ú300

DAS = ?ú100 months at ?ú300 - total paid ?ú30,000

Trust Deed - 36 x ?ú300 = ?ú10,800 + Equitable value of the property.
to enable Creditors to be paid in full + Statutory Interest + Fees and Outlays. Statutory interest is paid to creditors when there is sufficient funds available - in your case the Trustee may consider the fact that there is equity to that value and therefore it should be paid/realised.

Even if Trustee considers Statutory Interest should not be paid you will still be paying in excess of ?ú30K given the Trustee's Fees (could be around ?ú4K (inc VAT/Outlays)

Outlays Edinburgh Gazette ?ú70 approx
Valaution of Property - Drive Past ?ú60
Accountant in Bankruptcy Audit Fees - ?ú250
Registration in Register of Insolvency - ?ú36
Inhibition and removal of Inhibition at end of Trust Deed - ?ú30
VAT on Fees and Outlays

It will soon mount up

That is why I suggest you spend more time looking at the Debt Arrangement Scheme. If necessary phone your local Citizen's Advice Bureau for an appointment.

T

Thank you insolvencyboy,

I looked at some info on the IP's last night and I wasn't told that part of the ?ú280 I was paying goes to them for fees. I DID ask how they earned their money and was told the creditors pay but the truth seems to have been bent in that respect.

I need to look into this 'degree of protection' you refer to amongst other things.

I'll get cracking tonight.

Hi ebs

Insolvencyboy is correct. The DAS scheme was set up for circumstances to your own and would certainly provide the better solution. It will be over a longer period, but if the market picks up in a year or 2 then the option to remortgage may be available to release funds to bring the DAS to an earlier close.

Mark

Hi guys and thanks again,

So far a couple of things are bothering me re the Das.

1) An approved payment distributor is required (like an IP?)so am I back to lining somebody's pockets?

2) Part of the criteria is my disposable income...my D/E is possibly a negative figure as I do cash in hand work and have no proof of income for that whatsoever.

Hi equity but skint,

If you want to enter into DAS, a Trust Deed or a commercially provided debt management plan there are going to be charges. They are providing you with a service for which the costs have to be paid and individuals make a living.

An alternative would be a Debt Management Plan from CCCS. They will not charge you, they would be paid by your creditors. You would not have legal protection from your creditors.

Another alternative would be to negotiate and continue to renegotiate reduced payment arrangements with each of your creditors yourself. You would not have legal protection from your creditors.

Your disposable income is based upon all of your income and expenditure. The more formal debt solutions might open a can of worms if (and I am not suggesting that this is the case) it were to turn out that tax was not being paid on undeclared income.

Payment Distributors under the DAS are approved by the DAS Administrator (the Accountnat in Bankruptcy) they are paid a set fee, which I believe to be 10p in the ?ú distributed.

The creditors are effectively paying this administration fee as you do not have to supplement this payment.

For example ?ú30K Debts at ?ú300 per month - will result in a payment of ?ú3K over a 100 month period. Not really lining anyones pockets.

The ?ú3K is written off by creditors as a form of payment for the collection.

I understand that Payplan are one of the payment distributors and understand they are also a non fee charging Debt Manager.

Hi insolvencyboy,

Thank you for your contributions to the forum over the last couple of days. We have a forum rule asking that visitors do not post web-links within forum posts and would ask that you observe this when posting.

Hello folks,
I'm back again and still doing my research in between getting stressed out with long hours. Anyway, I was about to get cracking on the DAS but one of these fee charging companies who tried to take money from me up front is saying I should go for the trust deed. Now, as you have stated, and I agree and also trading standards nearly fained at the suggestion, I CANNOT GET A TRUST DEED AS I'M NOT INSOLVENT...this company are STILL trying to send me down the trust deed route where I have no intention of going BUT they are saying my disposable income isnt enough to meet the criteria for DAS, mind you the figures to which they refer were 'arranged' to suit the trust deed criteria so naturally I became suspicious as I've no intention of avoiding my debt far less end up in court for something untoward.

Basically I need to know if I'll 'fit' criteria so I'll use a scenario (insolvencyboy's scenario made sense to me)for you to find fault with re DAS.

Debt 30,000

Car HP 10,000 (PAY ?ú400 PER MONTH)I want to keep paying this

LOTS OF EQUITY IN HOME BUT CAN'T AND DON'T WANT TO SELL.

No proof that ?ú20.50 per week received for board from one grown up child.

Undeclared cash income of ?ú40 per week. No prrof of this AS YET as still to declare it on tax form as soon as time permits.

Disposable income per month ?ú190
Cash job (undeclared) per month nets to ?ú128
Board from student child per month ?ú82

TOTAL PER MONTH ?ú400

Can I do the following.........

24 months x ?ú400 ?ú9600
25 months x ?ú800 (care HP cleared) ?ú20000
1 month @ ?ú400 ?ú400

TOTAL PAID TOWARDS ?ú30K DEBT ?ú30000