Welcome to the trust deed forum Spongebob.

It's generally possible to carry on as a Director with a protected trust deed. There may be a couple of things that need to be done to facilitate this, which is something you'll want to run through in detail with your adviser if you choose to proceed.

The question of the shares is interesting. If they only have value if you leave, and they can only be sold to people who are not in a position to buy them, I wonder if they have much real value at all right now. Please look out for some thoughts on this from our experts when they next visit the forum as I'm sure they'll have dealt with similar scenarios in the past.

Hi spongebob

There should be no issue with the directorship unless you have something written into your contract.

Your shareholding appears low and also shouldn't be a problem. The value could be calculated with a set of accounts. Any value could be paid by additional payment(s) or third party. I assume, unless it has multi million turnover and profit then this would be nominal.

Mark

Hi Mark
although the percentage is low the value is actually more than my unsecured debts as it's a fairly profitable business. This is my problem as technically I could pay the debt off and start fresh if i could get the money but I'd need to leave my job which I've put 20 years of hard work into. I don't see how I could possibly cover the potential value with additional payments and i have spoken to various third parties already for help and got nowhere. I've also tried to find a buyer for the shares and I tried to get one large bank loan with the shares as collateral. Feeling pretty stuck and down about it all as I can't keep juggling this for much longer.

Hi Spongebob.

How much do your unsecured debts total at the moment?

Do you have a feeling about how much you might be able to pay towards them each month (via a trust deed or other options)?

Hi, total is 60k but 25 of it is cards at very high rates so im getting nowhere with that. I'm somehow managing to pay £1200 a month at the moment to debts but I can't keep this up. Ive been borrowing from family recently which I hate doing. My wife gives me between £300 and £400 towards them a month but they are all in my name and she is loosing 2 shifts at work soon so that will stop. My discount rate on my interest only mortgage ends in 6 months so that's going to go up by £200 a month. I could probably pay £400 to a trust deed a month, possibly £500 at a push.

Hi spongebob

It's difficult to fully assess as you would appear to be solvent. Are you aware if there are any restrictions on the sale of the shares? If so, what are these. If there was then this may provide for a clearer route.

Mark

Have you looked into the Debt Arrangement Scheme at all Spongebob? It may well be relevant if the share asset that you own makes a trust deed unavailable or unsuitable.

Unlike a trust deed it excludes your assets; repayments are from surplus income only.

Like a trust deed it would provide legal protection from creditors and also guarantee that interest would stop.

It would also enable you to balance your budget going forwards.

One main difference of DAS compared to a trust deed is that no debt would be written off so the term will be longer in many circumstances. For example, £60000 at £500 per month would take ten years to repay. However, you would have the opportunity to preserve the value of your asset which may be very valuable to you in the future.

Hi mark, the letter I have from the company states that the value of the shares will be calculated as a percentage of the net asset value of the company from the last set of accounts and is payable on death or departure from the company. The company is a privately owned limited co with 98% held by the family so the shares can't be sold to general public only privately traded or exchanged. Unfortunately they have no intrest in purchasing my half percent possibly because It ties me to them and my job until retirement. Although on paper it is technically worth £70k before tax in reality I can't get it without giving up my carreer!

Hi TDA, I will look into this DAS as I hadn't considered it but it sounds like an option especially as most of the monthly payments I make go to interest which would be frozen. I take it a DAS would destroy my credit rating like a trust deed? If the interest is frozen is it classed as defaulting on the debt even though the full amount is payed off over time?

Hi Spongebob.

Getting behind on contractual debt repayments (either within or without any of these debt solutions) is damaging to a credit rating.

Any Default Notices that were issued by the creditors (which they could choose to do) would be marked as "satisfied" once the debt had been repaid. They (like everything else) appear on a credit record for six years and then will no longer be visible.

Hi spongebob

It's an interesting scenario with the shares. I can't see a Trustee able to force you to leave your employment, so you may well have an contingent asset with no realisable value as such.

It would be interesting to see the full terms & conditions of the shareholding and also the most recent accounts to firstly see if the trust deed as well as DAS is viable and secondly to work out an actual value.

Also, the money paid by your family/wife, depending on full assessment, could be used as a third payment vehicle for a value of the shares.

Lots of possibles. Sometimes it's just in the way that you structure these things. As long as you are completely transparent with creditors, there's usually a solution.

Mark

I'll read up on the DAS option as I've only really looked into trust deeds and get back to you, Thanks for your help