Hi CIF.

I'm sorry to hear that you're having to deal with this again.

I think the best starting point for you here is to get debt advice. When you do this you should have found out already how much a repayment mortgage would cost you each month.

You may find that you can switch to a repayment mortgage and still afford a contribution amount that means a DAS will not last too long.

You may find that you can switch (in advance) to a repayment mortgage and still afford a contribution amount that makes a trust deed viable.

It's also possible that switching to a repayment mortgage could leave you with insufficient spare funds to make a DAS or trust deed payment viable. You'd probably want to avoid this scenario as a homeowner.

TDA has summed it all up nicely. It is perfectly valid to enter into a DAS or a Trust Deed whilst paying off a repayment mortgage and happens all the time. Which of these options is most appropriate will depend upon how much equity there is in your home, how much your debts total and how much would be available in your budget to offer to creditors.

First stop is to give the details of your particular situation to an adviser that can help to assess this for you. Either of the experts on the forum could probably give you a reasonable idea as to what might be viable within the space of a short phone call. Alternatively you could seek assistance from a debt adviser at your local advice agency.

Hi CIF,

It’s a lot more common than you think and Kevin and I both regularly deal with people who need a second Trust Deed or even a DAS to deal with debts.

The best thing to do is reach out to an expert for some one to one advice. A good expert will work with you to look at your options including the mortgage scenario and if a DAS is the best option of if it is better to do a Trust Deed.

How much debt do you have and who do you owe this to?

Don’t beat yourself up about being in debt again. It happens and the positive thing is that you can enter into a plan to deal with it.

Total is around 43k. There isn't one creditor dominating. Largest single sum is £8,000 in form of a personal loan (Honeycombe Finance). Others are a mixture of loans and cards to Nationwide, Tesco, MBNA, Argos, HSBC, Halifax, New Day, Bank of Ireland and Capital One.

My take home pay is 2,014 per month. Switching to repayment mortgage would be 675ish per month. No dependents, live alone.

I only got discharged in 2013. Worried re that being too recent and only switching mortgage to interest only befote applying would be cause for rejection of any TD.

Hi CIF,

Based on what you have advised it looks like a Trust Deed could be a suitable option especially with approx. £43,000 of debt. Don’t worry about being discharged in 2013 and now having to consider a second Trust Deed. That won’t stand in your way and neither will moving over onto a repayment mortgage.

How much do you think your house is worth and what is outstanding on the mortgage? Hopefully there is no equity or a minimal amount.

Those creditors are good to deal with as well and it helps that the debt is spread about.

Based on your take home pay of £2,014 per month and the mortgage of £675 and taking into consideration the other bills that you have how much do you recon you could afford to pay per month towards a plan?

Working through a very thorough budget with an expert will be key to determining an affordable payment per month and something which the lenders will consider accepting.

Hi CIF

I too would expect a previous Trust Deed and recent remortgage to present no particular problem if you choose to go down the Trust Deed route again. We have certainly dealt with clients in the past in these circumstances where we have been able to arrange this for them easily enough.

As long as your equity is not too high and if your affordability means that a DAS payment programme would be quite lengthy, then a Trust Deed is certainly an option worth considering.

Firstly, thanks for all of your help guys. It has been a massive relief to know I have an option.This forum remains an absolute gold mine of a resource.

David, honestly not sure what would be acceptable but certainly no less than £400 as a contribution. I think £500 might be too much of a stretch but would need to sit down with someone.

I think there is no more than £5,000 equity. £8,000 at a push.

My mortgage is with NRAM and it says on their site that I can switch to repayment but I have to apply. I thought it would be a straightforward switch over. I've no idea what could be involved? Now worried they would turn me down for this if they were to credit check me. Would it be a case of being upfront with them and advising repayment is affordable as I am going down a TD route?

If worst case scenario where they refuse, would my unsecured creditors accept that I would have to make overpayments instead in order to service the mortgage? Just paranoid about this now as I had to keep payments to interest only in first TD.

Hi CIF.

I'd expect that NRAM would be 100% delighted if you asked to switch to a repayment mortgage! It means that they get their money back sooner. It's also less of a regulatory headache for them.

My advice would be to contact them to get a decision in principle. You can then plan your next steps from there.

Hi CIF,

You are welcome. Glad we can help with some advice and that it’s helping you.

It’s important that any payment that you pay towards a Trust Deed is affordable and sustainable. There is no point in paying a payment which you are really going to struggle with for the duration of it. That’s the importance of speaking with a good expert as they will keep you right and make sure that the payment is affordable but is also something which the creditors will accept.

It’s probably a good idea to speak with NRAM about changing over to a repayment mortgage as soon as you can so you understand the process and what is involved and also the likelihood of this being possible. It could be faily straight forward but you won’t know until you speak with them. A quick phone call could put your mind at ease. I’m sure there won’t be a problem.

I agree with TDA, speak with NRAM first and also reach out to an expert for some advice. If you can combine it all at the one time I’m positive it will help put your mind at ease. You never know if you did all of that today or this week by the weekend you would have a clearer picture of your future.

I can't see that NRAM should have a problem with your credit rating as it isn't as if they are extending you any further credit, merely arranging repayment terms for what you already owe them.

If you are correct about the level of equity in your property then I am certain that it wouldn't cause any difficulties if you decide to set up a Trust Deed. Your contribution level should be more than enough too - in fact I would say that even if your mortgage payments go up a little higher than you expect then you should still have enough left over to make a Trust Deed viable.

Good luck with NRAM - let us know how you get on?

Thanks guys. I do need to make some calls but have very little free time at the moment.

One of the shopping list items is a bank account. Was hoping to sort a basic one before I applied for TD but that doesn't seem possible. Seems you need to be in one to get one. Currently with Coop but don't owe them any money.

Hi CIF,

If you don't already have it, won't Co-op let you downgrade to their Cashminder account?

My understanding is that they're happy to do this if you explain that you're having some financial difficulties.

Right. So NRAM need to book me in with an advisor to switch to repayment. None available till 22/8. They will not switch without the advisor say so and want details of income and expenditure and details of any TDs. So it looks like I will not allow to switch and all they can advise to do is make overpayments.

So if I am not on a repayment mortgage when I sign the T, my creditors will only take into account the interest only payment for income/expenditure? That means 4 years where my mortgage isn't getting serviced and not enough time when I come out to make up the difference in 8 years.

Help!

Hi CIF,

It’s tricky to give specific tailored advice over a forum like this without knowing full details of a persons circumstances.

I think your best option is to reach out to an expert for some advice. If you do that we can look at all of your options, a budget, the mortgage and then see if there is a way that we can make it all work out.