Hi syb1010,

Welcome to the forum. We'll do all that we can to help give you the information needed to make an informed decision.

Could you let us know how much you estimate the car to be worth?

Could you also let us know how much (if anything) you feel you could afford to repay towards your debts each month after essentials are paid for?

Essentials would include rent, council tax, utility bills, transport costs, food, clothing etc etc.

This information will help the team to guide you towards a decision.

Thanks for your quick reply.

Car is worth approx ?ú3k. At the moment I could reasonably afford upto ?ú180 max.

I got a phonecall this morning to say there was an ip willing to take on a trust deed for me and my repayments would be ?ú160/month. I'm just not sure if this is the best way forward - it seems to be made out to be an 'easy' option?

Thanks

A Trust Deed isn't an easy option.

It sounds to me that you may have been speaking with someone who wants you to believe that it is. You'll be the best judge of why.

A Trust Deed is a great option for someone facing overwhelming debt and who does not have the ability to repay the full amount within a realistic timeframe. The arrangement will benefit creditors by their receiving a return based on what you could afford, and you by ensuring that in return for your best effort to pay what you can afford for a fixed period that you have some light at the end of the tunnel.

It's an "insolvency" which will have a significant effect on your credit record for six years and may have to be declared on mortgage applications for longer than that. For a very limited number of professions it may not be possible to do a Trust Deed. You will have to live on a tight budget during the Trust Deed.

You would be likely to be able to keep the car and this would be discussed with you in advance of signing anyway.

Would a debt management plan be better? On debts of ?ú14000 paying ?ú180 a month you would take at least 78 months (roughly 6.5 years) to repay the debt. That figure would be longer if creditors did not agree to freeze interest/charges or if you were paying a fee to the debt management organisation working for you.
You might feel the longer term worthwhile if you are minded to repay the full amount or you wished to avoid an insolvency (a debt management plan would still have a negative effect on your credit record though likely less serious than a Trust Deed or sequestration).

Sequestration would likely have similar effects to a Trust Deed though you would want to clarify the position regarding your car.

Another possible option to consider is the LILA scheme (low income low assets sequestration). You can read a little more about it here:
http://www.aib.gov.uk/MainNav/Services/Legislation/accesstobankruptcy/Debtorsapplication/Lila

Mark & Kevin who answer questions on this forum might be a useful contact point for you. Though they handle Trust Deeds both are diligent in ensuring that other options are considered as well. If you wished to liase with them they are available via their profile pages on the left hand menu. This may be helpful as we are aware that there is a confusing amount of information and options available.

Sorry that I cannot point you directly towards a single option; it's important that you have the information you need to feel that you can make your own informed choice.

Thanks,

The 180 is an absolute max cause I would still struggle after paying that. I was informed that sequestration would be my other option but I wouldnt be able to keep the car as it has a value of over ?ú1000, which means I cant get to work to earn etc etc.

I spoke to a government funded advice line who confused matters further by saying that I didnt have sufficient disposible income to to on a debt management plan or a trust deed - that self negotiation (which has been tried and failed) or sequestration were my only option.

The trust deed does seem a 'good' option as I know that everythings frozen, set amount every month and that I dont have to deal with the stroppy letters I have been so far. I suppose I just wanted as much advice as possible. Have an appointment with CAB but its not til the end of next week and i'm already worried sick.

Let us know how you get on with the CAB.

If you want any further advice or opinion regarding the options this forum and/or Kevin and Mark are here to help.

Good luck

Hi Syb1010

I've undernoted some pointers which will hopefully assist/clarify matters:

Debt Management - This would take approximately 6 - 7 years at ?ú180 p/m. However you would also probably be paying soem sort of monthly fee, thereby reducing the amount to creditors and extending the repayment period to closer to 10 years+

Trust Deed - This is possible at ?ú180 p/m. You would retain the use of the car in a TD as this is required for work to help to pay the contribution. This would be over a 36 month period.

Sequestration - You could petition under the LILA scheme (cost ?ú100)
Only vehicles valued at over ?ú1,000 vest in the trustee. If a vehicle is valued at over ?ú1,000 and the trustee thinks that it is cost-effective to sell it, he/she can unless the vehicle is considered essential to the debtor to get to work so that he/she can make a meaningful contribution. But you would need to maintain the agreed regular contributions. If you fail to do so without reasonable excuse, the trustee can repossess the vehicle.

DAS - You could look at a Debt Arrangement Scheme. This would freeze interest, but you would need to pay off the entire debt over a 6-7 year period.

I don't consider DMP to be viable and you should maybe look at a more formal proposal.

Hope this helps.