Hello going round in circles and welcome to the Scottish Trust Deeds forum.

I'm sorry that a bad debt has led to so much trouble for you.

Could you let us know how much unsecured debt your husband has?

If we were to cease trading it would be about ?ú63,000

Hi going round in circles.

I'm sorry to hear of your financial difficulties, unfortunately I think there are quite a few people in your circumstances due to no fault of their own!

As per TDA's post above, we really need to know how much unsecured debt your husband has before we can help you decide which option is best for you and your husband.

Julie

I think Julie and going round in circles were writing at the same time!

Given current trading conditions do you feel that it would be possible to make a monthly contribution towards the debts?

What sort of amount might be affordable (after all of your reasonable living expenditure has been taken into account)?

I presume from what you have written previously that remaining in your home is a major priority?

Sorry to continue asking questions but the answers are helpful in weighing up the alternatives that might be available.

We have resigned ourselves to having to sell the house but would be easier if could stay it in due to space as there are three young adults (our kids) as well as us in the house. We have tried aking folk we know who deal in property if they would buy it from us and rent it back, but this has not been successful.

We could pay ?ú500 per month towards the debt. But if we stop trading some of the debt would be owed to the HM Revenue for VAT.

There is no court orders against us yet but with the cash flow bad at times we have had to pay business bills on the credit cards if they have been returned direct debits. Normally we can see a light at the end of the tunnel but this time not.

Hi GRIC

can I ask what type of business it is. Don't be too concerned with VAT etc as they are usually fine with Trust Deeds.

The Trust Deed would at least stabilise matters and avoid house sale etc until a solution could be found. Depending on the nature of the sole trader business, this could possibly be restructured for a fresh start.

You mentioned your children buying the equity and this is always a possibility. Things that always look the darkest are rarely as bad as you imagine and there are normally short or long term solutions available.

Mark

We have a haulage business.
I have been reading through the forum and the main worry is releasng the equity. I am still confused as to wether I or one of the kids would have to get a mortgage for ?ú91,000 or ?ú34,0000 or as appears to be the norm at the end of the TD would they extend the period or would we still have to sell.
Are there any companies who would buy the house of us for fair market price & rent it back to us?

Hi
generally you would need to release the sum equal to half the equity.

Remember the equity is trust deed valuation less redemption divided by two.

Mark

Do you think that creditors would accept 50p to the pound. Would this be possible to offer this through a solicitor as an alternative to a trust deed ?

Sorry to butt in GRIC as I'm not a professional however, last year I trawled the net to look for a cash buyer for my house and the best price I was offered was 130k for a 195k house. I told them politely I had approached them as I wanted to SELL the house NOT give it away and keep paying for it after I left! There are lots of companies who will buy and rent back but it will be THEM who get the equity and not you.

Hi GRIC

In my experience, it is extremely difficult to get any sort of uniform agreement when matters are dealt with in an informal basis. The more creditors there are, the more difficult it is. Your biggest problem will be getting someone somewhere to make a decision.

However this could certainly be something you could look at. It may be that a large percentage agree to this and this, at least, gives you a smaller amount to deal with.

Mark

Hello going round in circles,

A "sale and rent back" scheme is almost always going to go through at considerably below market value; if it doesn't there is little incentive for the purchaser.

There are also a lot of horror stories where these types of schemes have gone wrong. For example the purchaser ceases paying the mortgage (because their circumstances change) and the house risks being reposessed. Other people have found that they have only been able to rent the property for a year or two before the purchaser asks them to leave.

In terms of your mortgage:

You currently have a property worth around ?ú125000 with a mortgage of ?ú57000. It is jointly owned. The total equity is around ?ú68000 which, as it is jointly owned, means around ?ú34000 for each of you.

Using these numbers there might be an expectation that ?ú34000 would need to be raised for a Trust Deed. This ?ú34000, if found via releasing equity from the property, would mean that total borrowings on the property would increase to ?ú91000.

This could mean remortgaging with a lender for the full new amount of ?ú91000.

This could also mean getting a second charge loan (secured loan) for ?ú34000 in addition to your current mortgage.

If the home is worth ?ú125000 (in the eyes of the mortgage lender) and you require total borrowings of ?ú91000 the "loan-to-value" comes in below 75% which is very helpful in terms of obtaining a mortgage.

It could be very difficult, in current conditions, for anyone in a Trust Deed to remortgage.

You have mentioned the possibility of your son going on a new mortgage which may help if he has an income and a reasonable credit score. If your son already owns another property, or would like to buy one in the future, there may be additional complications for him if he gets involved in the mortgage of the family home as well.

These sorts of mortgage/lending questions are really best put to a mortgage broker but I hope that this is a useful starting point.

Can I just check, GRIC, are there any business assets? Presumably there is a truck or something similar? Are they leased?

Yes there are two trucks which if we were to hand them back we would have half the loans still to pay on them. Thinking now we can just sell the house and use the equity to pay all or most of our debts, not sign the trust deed and that would allow us to carry on trading.