Hello liviangel and welcome to the forum.

I presume CCCS also presented the options of a Trust Deed or the Debt Arrangement Scheme to you as well?

In terms of whether you have done the right thing it really depends on your priorities and outlook. To give you some comparison:

A debt management plan is the least formal and most flexible option. It does not provide you with legal protection or any guarantee that interest and charges will be frozen (though they often will be - though not always immediately). Your home will not be involved unless lenders take legal action against you. Assuming all interest and charges are frozen the plan looks as though it would run for nearly 10 years.

The Debt Arrangement Scheme would provide you with legal protection but is somewhat more formal and less flexible than a debt management plan. It would guarantee that interest and charges would stop. It would almost certainly not involve your home in the circumstances you describe. You might expect it to last around 10 years as well.

A Protected Trust Deed is a serious step to take as it is a formal insolvency. It provides you with legal protection and stops interest and charges. Where there is equity in your home (or other significant assets - such as a valuable car) you will need to contribute the value of these assets towards the debts as well. It would normally last for 3 years.

How would your home be treated in a Trust Deed? If there is no equity today it seems to depend on which firm you select to help you and the content of your Trust Deed:

1-Some firms will decide that as there is no equity in your home that the home should be specifically excluded from the Trust Deed. They will put this in writing to you and provided the creditors agree to the Trust Deed that will be the end of it.
2-Some firms will follow the same process as in the scenario above and charge you ?ú500 to do so.
3-Some firms will want to revalue the home towards the end of the Trust Deed and if an asset has developed they will want you to contribute the value of that asset before the Trust Deed comes to an end. If you cannot raise the money a threat to the home is created.

Many good Trust Deed firms, including those we are proud to feature on this site, will follow either option 1 or 2 above. If you read around the forum you'll find worrying stories where option 3 has caused significant problems for our visitors and members.

I hope this information is useful to you in clarifying whether you feel confident that you have been advised well and made the best decision for yourself. Should you feel that DAS or a Scottish Trust Deed would be a better route for you there is nothing to stop you changing.

The only option CCCS gave me was the DMP.

I take it from your reply that even though my creditors have not stopped charging interest yet they could still do so? Should I wait a few months and see what position I am in with my creditors then?

Hi liviangel,

It's dreadful that the CCCS did not advise you of all of your options. So you are aware, the option they recommended to you just happens to be the only one of the three that most lenders will pay them to operate for you.

Creditors may decide to freeze interest on the accounts included in your DMP. You may wish to wait and see, or you may wish to consider the benefits of the other options as I previously outlined them.

All of these options have advantages and disadvantages attached to them which you need to weigh against your own circumstances and preferences.

Hi liviangel

unfortunately this seems to be more and more common, where firms, even the supposed charity firms offer options which best suit the firm rather than the individual.

I remember CCCS getting a mention before for something similar.

Mark

Really confused now!! I thought going through a charity would be the best thing as they wouldn't be biased towards any one solution and would recommend what would be best to me.

The advantages of the trust deed are appealing in that I could have my debts sorted in 3 years instead of 10. However I am worried about the formality of a trust deed in respect of my house (If there was any equity which I doubt I couldn't afford to release it without selling the house) and my job (i'm a civil servant and so supposed to be responsible and an upstanding member of the communty and not supposed to get myself in messes like this)

Hi liviangel

if there's no equity in the house, the house will be fine.

In terms of your employment, I don't think there will be any issue, although always best to check your contract. I have dealt with a number of civil servants, with no problems, but best check anyway.

Mark

Hello liviangel,

I think you have every right to expect a debt help charity to deliver objective and full advice.

I'm very sad to see once again that this hasn't been the case.

This news article from The Times a month ago is illustrative of the problems people can face in establishing the best option to deal with their debts (and refers to the way "free" debt management plans are actually funded). Commercial advisors are also criticised. It applies to a case in England but the similarities of the issues are obvious:

http://www.timesonline.co.uk/tol/money/borrowing/article6998672.ece

Additional regulation is being considered for the debt advice industry (including charities) and it would seem it cannot arrive soon enough.

I'm afraid the link to the article does not seem to be working

Sorry that it isn't working on your computer liviangel. I've just tested it on mine and it worked OK. Perhaps if others cannot get the link they could let me know?

Please try link below, as tried and tested.

http://www.timesonline.co.uk/tol/money/borrowing/article6998672.ece