Very interesting stuff, trust deed assistant. About time that the voices of ordinary people are heard in all of this.

Interesting and worrying reading. Is there any timescale on when or if these proposals would be enacted and become law ? And if so would there be a risk of a "buy your trust deeed now before stocks go??!!".

The one certainty is that debt will NOT go away, and indeed the UK is on the cusp of a debt tidal wave as recession hits the many thousands if not millions of people (myself included) who spent spent spent (on credit) through the 90s and noughties and now, due to life changes, recession etc are paying the miserable price of debt worry and pain.

On a more positive note Merry Christmas to one and all !! [:)]

Hi Buz.

During an AIB stakeholder meeting last week there was some conjecture on Twitter that Government enthusiasm for a minimum dividend may be on the wane.

Lets hope so. Major creditors don't want it. A similar move with IVAs in England and Wales was a total failure and has been changed back. Our survey shows that the ramifications for those in debt could be very negative as well. Indeed, nobody benefits and lots of people/organisations could lose out.

Any changes that are made, will only apply to new trust deeds signed after the changes are implemented. Those already in trust deeds will still have their trust deeds run with the rules that were in place at the date they signed. So yes, you can "buy now before stocks go!"

I am very conscious of always being the odd man out on this subject.

Trust deeds and bankruptcy are both personal insolvency. You wouldn't consider either unless you were apparently insolvent. Would you? Leaving aside 'write off your debts in three years' advertising campaigns.

If you are apparently insolvent, and looking at insolvency solutions, why would you choose a trust deed over bankruptcy?

Maybe you are in a profession where bankruptcy means that you would lose your job. Or you are the director of a company. Or are - or harbour ambitions to be - an MP.

If you're not, then you have the choice between an insolvency option where you will be discharged after one year - unless your trustee goes to court to have that extended - or an insolvency option where you will be discharged after you have made all your payments (in your trustee's view), however long that may take. Your discharge may also be delayed by your trustee making PPI claims. It's all at the trustee's discretion.

In bankruptcy, you may have an Income Payment Agreement which lasts for 36 months (max) from the date it is imposed. In most cases, you will still be discharged from bankruptcy after one year. In a trust deed, you may agree to make payments for how ever many years. Your trustee can choose to extend the length of the trust deed to make sure those payments are made. You won't be discharged until the trustee agrees to do so.

In a trust deed, you could pay for a year, and then see your trustee get discharged, while you still owe all of your debts. In a bankruptcy, you could get discharged after a year.

Whoops! Hit 'post' earlier that I intended to [:I]

Maybe that's not a bad thing - you'll have got the gist already [:)]

Hi candlewick.

The forum is better for having a variety of views present.

I doubt that any of the professionals would dispute anything that you have said. For most people (that have both options open to them) there is probably little difference in practical terms about how a trust deed or bankruptcy would work for them.

For smaller numbers of people there may be particular practical advantages for one or the other of these options.

The survey (which we're getting close to releasing now!) asked respondents how they feel about protected trust deeds and how they feel about bankruptcy. The answers may help to identify some of the areas of difference about how these two options are generally perceived (rather than how they work practically).

By the way, if you make a posting mistake (which I do all of the time!) pressing the little pencil icon that appears on your post will allow you to edit or continue the post.

I think in the 21st Century we need a forward thinking Government who can look at the options and make decisions based on the current system, the views of creditors, IP Firms, the views of the public and the views of those in/just completed an insolvency. It appears they have 'considered' 2 of the 5.

At present we appear to be in a consultation on change which may change the landscape in April. At present however we have at best a very rough guide on what those proposals might be and the possibility that the government is re considering their thinking on a minimum dividend which know one knows the figure for!

I think there is a drive to increase DAS & Bankruptcy and decrease TD's. Call me cynical, but the 1st 2 will provide a greater income stream for the AIB, especially if the sequestration increases to 4 years. Bearing in mind they receive the supervision, registration fees etc, they will now receive 17.5% of the Trustee's fees over a 4 year period.

There has been a steadying of TD numbers and Sequestration numbers and a massive update of the DAS. Although this is still relatively in its infancy. So it is interesting the thinking behind the proposals.

Or perhaps as the AIB says, 'the Ministers want it'

Mark

Added to the site today, an analysis of the proportion of debt arrangement schemes that may not ever reach completion (based on AIB stats):

Not added to be critical of DAS. We think it is a great scheme. It's just to underline that when you undermine choice, and when you push people into very extended debt solutions, the outcomes may not be what you assume they will.

I'm just back from an AIB "stakeholder event" and to be fair it does seem that they are listening.

As trust deed assistant noted, they are indicating that the minimum dividend proposal for trust deeds will probably not be taken forward after all. There are also a couple of other areas that they/the scottish government seem to be rowing back from - for example the proposal that some sequestration petitions by creditors would not have to go through the courts.

The group that Mark has missed out when it comes to consultation is the money advice community. It was heartening today to hear the debtor's perspective being put forward by these advisers. When combined with surveys such as this one then at least it seems that there is some hope that the AIB will listen and feed these views back to the politicians

A thought provoking article regarding DAS failure rates, trust deed assistant.

Interestingly, the stats for DAS do show that the average debt total for new DPPs is coming down, as is the average expected term. At least this would suggest that things are moving in the right direction, as DAS is likely to be far more effective over realistic, shorter periods.

I think that may be a general trend in the future for all debt solutions Kevin.

The banks and credit card providers aren't offering the same huge lines of credit that they were a few years ago and seem to be getting a little better at affordability testing before lending. This would suggest that average debt totals will fall over time.

The counterpoint to this is the rise of high-cost lending. While people might have lower totals of debt, for some their monthly repayments might still be very high due to the excessive costs of payday or doorstep loans.

This might suggest that some people will feel encouraged or pressured to deal with debts that are causing them problems while their total level of debt is lower than it may have been (on average) a few years ago.

Over time this trend may well encourage more people to use the Debt Arrangement Scheme as it may become a better fit for more people's needs and circumstances. Lower totals of debt will often be repayable by DAS in a period of time that doesn't appear to be excessive.

The article added to the site on DAS completion is no criticism of DAS which is an excellent scheme that I'm sure consumers in England, Wales and Northern Ireland would love to have access to (rather than an informal debt management plan).

It's really just to underline that, where debt has reached a level that cannot be fully repaid within a reasonable period of time, there continues to be a need for personal insolvency alternatives that people are happy or prepared to enter voluntarily.

Unfortunately I wasn't able to attend this event but two of our administrators attended the AIB Stakeholder Event and returned with positive news on the minimum dividend level in a TD being reconsidered by the AIB. This was encouraging as it's the AIB driving this forward and from what we understand not necessarily the creditors.

The other interesting point to come from it was the proposal of the NINA (No Income No Asset) route into Sequestration and the removal of the LILA (Low Income Low Asset). The AIB suggested that the fee for this would be less than the current £200 for people to enter Sequestration. It was suggested that this would be a streamline Sequestration and more affordable to people on state benefits who it was deemed could not afford a contribution.

It will be interesting to hear the proposed changes and views on them when I attend the Stakeholder event in January 2013.