Hello Normand

Can i just check how much Unsecured Debt you have because there is a possibility that the Debt Arrangement Scheme is the most appropriate and is the route that will not need to resolve the equity release situation.
a breakdown of who owes what individually and jointly would assist enormously in both myself and others advising on the options available and potential pitfalls to each route.

Furthermore it would be suggested that you sit down with someone to go through each of the the options you are considering.

Chris

Hello

My unsecured credit card and over draft £60000
My husband credit card, store care and over draft £30000

Total joint income per month £3000.
Total outgoing including mortgage £3500 approx.

We are planning to speak to someone but am just information gathering at this stage.

Hope this helps.

Hi normand

I think they meant Protected Trust Deed. You can certainly rule out a DMP and I'm surprised ( or perhaps not) that this was even suggested by CCCS.

Depending on circumstances, I think the DAS option would be appropriate and this rules out Trust Deed and sequestration.

Mark

Hello normand and welcome.

Can I ask how the equity has been calculated? Is it an estimate or has a valuation taken place?

I presume staying in your home is a priority as it is for most people?

Did CCCS suggest an amount they think you can afford towards the debts each month?

It's rather shocking that a DMP has been suggested given that the debt arrangement scheme would guarantee a freeze of interest and legal protection from creditors, neither of which would be afforded by a CCCS debt management plan.

Hello

The equity is an estimate given that I think our house is worth around £195000 and our mortgage is £145000. It is a priority to stay in our home yes.
The CCCs financial situation summary would suggest that after our priority househould bills are paid we have £1018 available each month. Our monthly income is £3130, monthly outgoings £2112 and contractual payments are £2875. Not sure how all that is calculated out.
Our CCCs report from their online service does suggest a PTD or DMP or DAS.

I hope this all helps.

Hi normand.

With that equity a trust deed or bankruptcy would likely threaten your home.

DAS may well be a good option and could clear the debts in around eight years. You can read more about it here:

https://www.trust-deed.co.uk/debt-arrangement-scheme.html

With significant equity in the property creditors agreeing to a trust deed would likely expect this equity to be made available to them. Historically a sub prime mortgage would have made this possible but mortgages of that ilk are like hens teeth nowadays so its harder to get to the equity. Without a 3rd party to help loan you the equity you could end up paying 3 years of trust deed payments only to find selling the house is the only way to release equity. Das sounds like a reasonable option but do take advice from 2 or 3 insolvency firms to find out all the options.

Paul

Hi Folks
I just came across an article on a different site that indicated that changes to the bankruptcy laws suggest that home owners in trust deed would be protected from losing their homes as creditors would not be able to chase them for their homes. Can this not be used to protect people like myself who met the commitment over a three year period without fault but cannot now release equity ?

People keep saying on here to seek help from a third party , if that was possible then yes , however , it is not .

Hi goneunder.

That would apply with advance approval from creditors at the start of a trust deed.

The assumption generally is that creditors would have no commercial interest in agreeing to such terms.

When it comes to trust deeds creditors aren't chasing the sale of a property, the trustee has an obligation placed upon them, when their client appoints them, to realise the value of such an asset to help repay the creditors.

That makes it a difficult situation for everyone involved. I recognise that this must be really tough for anyone trying to raise the value of their equity and wish there was an easy solution to offer.

I'm wondering whether at some point creditors may need to accept a 2nd charge vs a house sale when no certain route is open to realising equity.
There could be a big number of people still to end a pTD in the next couple of years having been advised that the equity could be dealt with at the end and now not being able to.
I imagine changes will apply to new pTD's as they are signed, maybe not existing ones?
With the best will in the world,even with creditors accepting a sale at a keen price this won't ensure a sale as the shortage of mortgages is a key factor in low volume of sales as well as a downward pressure on realistic pricing.
I can only imagine the strain of facing this after 3 years of maintaining the plan to sort things out.

Hi Pamjo.

I think trust deed firms and their clients need to take responsibility from the start where equity is a factor or may become one.

It's been the case for many years that equity generally cannot be released by way of a new mortgage, so if there is no other plan by which this can be achieved a trust deed may simply be an inappropriate option and attention should turn to DAS instead.

I do have much sympathy for anyone that has been led to believe that releasing their equity would be easy. That's just plain wrong, but we still hear of some firms propagating this myth for their own commercial gain.

TDA , have to disagree , when i started my TD in september 2008 , i was advised i would have no problem getting a remortgage. I may not have entered the TD if i thought i couldn't get out of it .
I am lucky as i have a secure job and a great salary , but even that is not helping me at the moment.
I only hope that there is some legislation in the near future to help people like myself who are trapped .
To be honest i simply cannot keep going , this is worse than the calls at the start of all this from creditors . there seems to be no end at all.

Hi goneunder.

I appreciate totally that that's a horrible position.

One problem is that changes to the law are rarely retrospective. You probably wouldn't be helped by a change in the law.

The advice you received is highly questionable. By early 2008 mortgage availability had changed drastically for the worse, especially where credit issues were a factor.

hi TDA, completely agree re. taking responsibility at the outset. it does seem though that many of the people who seem to have this huge issue become a concern have been 'advised' that they would be able to remortgage later. Hindsight is wonderful and we all know now that finance of any description is tough to achieve. I'm sure many advisers also thought the situation re. finance in 2008 was bound to improve soon thereafter and that's why they advised this way. I'd also be very surprised if anyone's equity in 2008 hasn't reduced between then and now but that's where the problems seem to be biggest, if people either agreed an equity position which has changed or agreed to leave the calculation till a later date.

For Normand-sorry if I picked it up wrong but you've not had a valuation done in the last 3 months have you? I hope I'm correct in predicting that might result in a 'nice' surprise, as in a lower valuation. Even if you are basing your guesstimate on neighbours' sales, your valuation may be lower when done for this purpose. The valuer needs to consider what pricing level would result in a Very quick sale to release funds for the Trust Deed or Sequestration. It's a shame the recommendation you had is so general since DMP, DAS and PTD are so different in many ways which will be crucial to get right.