Hi hellsbells80,

Welcome to the forum. As you will see I am a new member too, only joinging last week. You have come to the right place for advice. We have a good mixture of people who work in insolvency (like myself) and people going through insolvency arrangements personally. So hopefully we can help out.

I understand that your husband is currently subject to a Trust Deed. I further understand that you have incurred some debt and there are arrears on the joint mortgage and that the secured lender is looking to repossess the property? Can you tell me what stage this is at? Have they served whats called a Calling up Notice? What level of equity (if any) do you roughly anticipate is in the property currently? And finally what level of unsecured debt do you have?

My initial thought is that a Trust Deed may not be the correct answer. A Trust Deed will unfortunately not prevent the secured creditor from taking the property in to possession. If the mortgage is not getting paid because you are using all the free income you both have to pay to your husbands Trust Deed AND to your unsecured creditors then, a Trust Deed may help here as it would allow you to make an affordable monthly contribution to the Trust Deed only, which would be cheaper than paying all your current creditors. This may also allow you to make an arrangement with the secured creditors to pay the mortgage and stop the repossession proceedings. However it is all dependant on the above.

If the secured creditor take the property in to possession, depending on whether their debt is redeemed in full and you receive net free equity, or whther there is a shortfall and they pursue you for the what would then be unsecured balance, this would also have a bearing on what options will be available to you. Let's hope that does not happen though.

If you give us a little bit more detail lets see what we can think of...

Is there any other reason that you are trying to sell the property other than it being unaffordable, hellsbells80? Also, is there any prospect of being able to cope with the mortgage payments if your unsecured debts became more manageable?

Sorry for all the questions - I'm just trying to find out exactly what your preferred outcome would be and whether there is likely to be a way to achieve it.

What has your husband's trustee said about the situation? To be honest, if you have been having to exhaust all of your lines of credit in order to be able to cover the mortgage payments then it suggests that the payment for his trust deed was unaffordable, so I would be a bit wary of recommending that you go with them too...

Hello and thank you for getting back to me so quick, I will try to expand on our situation as it may be a bit miss leading. We where living in the house for 2 years when my husband got made redundant, he was unable to find work and after 7 months we both looked further afield for jobs which we thankfully got. This left us the option to rent the house out which we did. Unfortunetly the tenants we got where bad payers and it all ended up a big mess in August last year when they disapearred leaving us no rent for 3 months and trashed the house. it cost us £6000 plus to put the house right and buckets of stress either we couldnt afford. We are renting out a flat where we both work and the house has been up for sale since October. There is £ 23,000 equity in the house at its current valuation but we have lowered the price down to its lowest amount just to sell and pay off the mortgage but we have had no luck yet. The mortgage company has informed us that on the 28th of this month there are going to begin legal action to take the property back. My husband can afford his payments to his TD and what he has left after all bills is still tight but very managable compared to how things were before. My problem is that I am now asking him to help me pay my loans and credit cards so a full reversal as he was asking me to help from my wage. Now the whole situation is just a nightmare and although we have tried to do the right thing and pay what we owe its just not working out, we have lost all our savings in the house and now find ourselves in so much debt. Crying doesnt help!

If you are trying to sell the house and not realize any equity, and you are already renting a property elsewhere and you have no other assets maybe sequestration for both of you is the way to go. You have nothing to loose and your credit record is pretty well trashed already. So in one year you could be clear of All your current debt.

Hi Hellsbells

It appears that the problem is the house and will depend on what you wish to do with this. The options as I see it would be to look at a Trust Deed for you and let the Trustee deal with the house or if you were looking to release some equity, perhaps the Trustee could speak with the mortgage company and assist in the house sale.

on track mentioned sequestration and the only benefit from this would be the Trustee's potential ability to take control of the sale of the house by issuing a S.40 notice to the mortgage company. I see little benefit unless you have insufficient income to look at the Trust Deed option.

Do you know how much your total debts are and what is potentially going to be released from the house should it sell.

Mark

Thanks on track something to look into. Just a nightmare but everyone on here has or is in a boat like ours and the advice is great to get options and solutions to the BIG mess we are in. thanks.

Thanks Mark, my debts are around £24000 and if the house sold for the current asking price we would get £10000 from this but my husband said that his half would be taken by his TD provider so i would get £5000. The house is indeed the main problem we have but to be honest the whole situation is just one big nightmare.

Hi hellsbells80

I think there are 2 realistic options. You deal with the sale of the property or hand the keys to the Trustee and ask them to deal with the sale and seek other accommodation. This would allow you to concentrate on looking for another property and the associated issues. You could try and negotiate reduced payments with creditors and see what transpires once the property is sold.

Alternatively you could look at handing the keys to the Trustee and looking at options to deal with your own debts ie DAS, Trust Deed etc.

It's the great unknown that's the killer, but once you can take back some control, it should be a lot more straightforward than you think.

Mark

Ok thanks Mark I think giving it a while longer to sell the house might be the route to take as we have moved out the house and are renting a flat where we now live and work. If that fails as it will be repossessed soon and if not sold option 2 would be my choice, but its good to have a option/route to go down. If the keys where handed to a Trustee and the house sold under the remaining mortgage where would we stand on repaying the shortfall?

Hi hellsbells

The Trustee would only take control of the sale if there was sufficient funds to clear the mortgage or the mortgage company agreed it could be sold at a lesser value. In the event of a shortfall, this would be a claim in your husband's trust deed, however the mortgage company could pursue you for the full balance.

Mark

Ok so if I entered into a TD and gave the keys to the Trustee would any shortfall then be a claim on both my husbands and my potential TD? or just one claim on one TD? At the moment we are taking from Peter to pay Paul and that is very soon not going to be a option but waiting that little while may at least sell the house I just dont know what to do for the best my head is getting fried.

Hi hellsbells

No whatever happens, the shortfall would be a claim on both Trust Deeds, irrespective of dates.

It may all seem jumbled, but the 2 areas of concern is the property and your own creditors. The property can be resolved if you let the Trustee deal with this and the creditors can be dealt with if you look at the Trust Deed or DAS to take care of them.

Mark

Mark

Thanks Mark and to everyone else for the advice you have given me today. I now know there is a route opened to me and feel better with that knowledge.

Hellsbells80,

Having reviewed the additional information provided, I can see that there is certainly at least a few options available to you that Mark has kindly elaborated on. Speaking to an insolvency practitioner (and perhaps the one dealing with your husband as they will be fully aware of the joint asset and liability position and it will be simple for them to tack on your individual asset and liabilities) they will be able to quickly run you through each option.

Equity in the property is a good starter for 10. Its an option. However, if it gets repossessed then at least you are both no longer living there. If there is equity then the creditors are entitled to this, if not then any shortfall would be split accross both Trust Deeds. So no massive gain or loss on you personally anyway. The main benefit for you however, will be making 1 monthly contribution over 36 months, as opposed to trying to 'robbing Peter to pay Paul' as you say.

On a first look it seems that you will qualify. Income, assets, not a massive unsecured creditor standing so getting the 10p threshold for creditors should be manageable.