Welcome to the forum Bitesized.

In DAS you'll be paying until the debts are fully repaid. That will take as long as it takes. Your credit record will be affected during, and probably for some time after, you're in the DAS. It's a less serious credit event than insolvency though (trust deed or bankruptcy). You're not allowed to take out more credit without permission.

In a trust deed you'll have a fixed finishing point provided everything goes to plan. The trust deed will remain on your credit file for six years from the time that it started; with the trust deed itself running for a minimum of 4 years. There's no rule against using credit while in a trust deed, but it's typically a pretty bad idea and is likely to be on unattractive terms (if available at all).

Which one will cost you more? It totally depends upon how much you owe and how much you can afford to repay each month. Trust deeds commonly result in some debt being written off, something that isn't the case usually with DAS. That can mean it's a shorter (and therefore cheaper) option for some.

How much do you owe? How much do you think you can pay each month?

We can probably give you a more useful comparison then.

Hi TDA,

Thanks for the response and the welcome.

You have more or less summed up my thoughts on the 2 different processes.

Don't want to look at Bankruptcy as I have a mortgage and I know that it is very unlikely that the house would ever be considered as an asset in this process - even though, would prefer to leave them well alone.

The trust deed looks good to me though

How much can I pay - I really don't know. I am currently paying around £500 each month trying to service the debt but I am also accruing more debt each month.

I owe somewhere in the region of £25K though

One more thing - I would not want my partner to find out anything about this - I know it's good to talk and share etc, but I do not want them to be part of this.

Do you think that there is any equity in your home Bitesized? If so, how much do you think?

Is the home jointly owned with your partner?

Hi Bitesized,

You've summed up each option well and it sounds like you've done some of your own research.

It's a personal choice really when it comes down to it.

As advisors all we can do is summarise each option, the pros and cons and then allow a client to pick what option they feel best suits their own set of circumstances. I find that hard sometimes as some clients really look to me for guidance and ask ÔÇ£what one should I doÔÇØ.

You need to balance what is important to you and what you would like to achieve in the future.

A Trust Deed as TDA has advised will give you a fixed payment per month and a fixed timescale. Your credit rating should begin to repair after 6 years but we have head from people on the forum that it can repair a little quicker than this. After the 4 years you will be debt free and will have the extra money per month to spend or save. It can however have an impact on your employment prospects so this is one factor you need to think about. Also, it will take into account any assets you have and any that you could acquire or inherit for the full period.

On the DAS, you are on it until your debts are paid back in full and even then, it can still have an impact on your credit rating for a little longer from what I understand. It doesn't take into account any assets which you have or any that you could acquire or inherit.

A good advisor should discuss all this with you, look at the pros and cons and also ask you about possible inheritance as this could significantly affect your decision. I'm dealing with a client at the moment and she wanted a Trust Deed as it would be over in 4 years but her elderly mum was seriously ill and when she passed away the client would inherit the assets. He mum passed away and now she will be in a position to clear the debts and without having to pay our fees or disclose to the family about a possible Trust Deed.

Who do you own the majority of your debts to? Different creditors under a Trust Deed have different acceptance criteria.

To work out what you can afford to pay you will need to work through a budget with a qualified advisor. After doing this is should show you what you could afford to pay per month.

Your partner wouldn't need to find out about it if you choose for them not to.

Hi Bitesized

In my experience the majority of decisions come down to timescale alone. I had a meeting yesterday with someone who had been in a DAS for 2 years which they were struggling to maintain. The period of the DAS was 13 years. This was a fairly simple case with no property and they were never advised of the other options. The biggest worry I guess is that there is a big change in circumstances in year 7 or 8!

For the Trust Deed to work, creditors will normally expect a minimum dividend and this needs to be affordable to you as it's never a great idea to replace one problem with another. So a lot will depend on what you can reasonably afford taking account of all income, expenses etc. As you say, if you are main payments at this level and the debt is increasing, then it may be an idea to look at what options are available.

There is no requirement to notify your partner, however in my experience it is always wise to let them know.

The best option will be down to 3 factors. The level of surplus which is reasonable to you, the period of time and finally the position with the property if there is any equity or no equity.

Mark

Thanks for all the replies.

I have a mortgage of around 42K on a property now valued at around 70K

I have a loan with Barclays with about 4K still on it.
A loan with Tesco with around (2.5K) still outstanding
The rest is all on credit cards, Virgin (8K) MBNA (5K) Tesco (2k) Barclaycard (4k) and rising.

Hi Bitesized

From the information there would appear to be gross equity of £28k. Assuming the property is owned, then half of this would be yours.

The Trust Deed valuation will normally be lower as it's for the purposes of the Trust deed, however this is something which would need to be looked at before making a proposal to creditors. Equity can be dealt with a number of ways ie extending the Trust Deed period or receiving third party payments/funds etc. Depending on the equity, the DAS option may actually turn out to be more suitable.

Your creditors are dealt with by 2 companies, so it is easy to work out their criteria to have it accepted if the Trust Deed proves to be the better option, however you should address the property position first.

Mark

Hi Bitesized,

When it comes to equity and a property in a Trust Deed you need to be 100% sure on how this will work and have this set out in writing.

First of all a valuation and redemption figure should be obtained to calculate the level of equity. As Mark has said the type of valuation we use in Trust Deed's isn't a market valuation but a forced sale valuation. Once you have done this you can then work out if a Trust Deed is still possible or not or if a DAS is more appropriate.

I would speak with your mortgage company and request a ÔÇ£settlementÔÇØ figure for your mortgage. This will show you exactly how much is outstanding and can be different from your actual mortgage balance.

Every firm is different in terms of how they will handle and deal with the assets you have and you need to ensure that this is clarified and confirmed in writing. Like Mark said there are a number of ways this can be dealt with. If this is done then there shouldn't be any problems later on down the line if it is a Trust Deed you decide to proceed with.

I think to really explore your options you need to speak with one or two qualified advisors to work out exactly how a Trust Deed or DAS will work.

The positive thing in all of this and it's something that I tell every client is that you have solutions available to help you deal with your debts.

Thanks for the replies.

I contacted Money-matters Ayrshire who gave me a polite phone call and told me that they would request CAB get in touch with me to discuss my options. I haven't heard anything since though (Only 2 weeks)

I get a bit wary when I do a Google search though as there seems to be an awful lot of companies pop up that promise to help - can't help thinking there might be a catch with some of them. (Same sort that seem to pop up on Facebook all the time - DebtScotland,Reduceyourdebt etc

Can't think what else to write - I am in a dark place at the moment

Hi Hoopsah

I may have misread something or may be missing something, however, why don't you use the link buttons on the left hand side and discuss with the IPs on here?

They have already answered some of your questions. If you are in a dark place, you need to be going faster towards the light. Waiting for someone to call is not the best situation so perhaps you could consider if any of the team here could be your Trustee or could give you the options you need. Not on the open Forum, but by contacting one of them listed in the blue buttons alongside.

As I said, perhaps I have missed something, so I am sorry if I am stating the obvious, however, if not, seems an ideal opportunity to get moving using the expertise here and not waiting on MoneyMatters and CAB (which could be forever unless you chase them up).

Hi Hoopsah

I would agree with Firewalker about the experts on this forum.

I can recommend David Tannock as an adviser because he gave me the advice that I needed to hear.

He is impartial, unbiased, sympathetic and gives you all the options available once he knows your circumstances, as everyone has different problems to sort out.

It is best to contact more than one expert, so that you can decide on who the best one for you is.

Hope all this helps you see the light at the end of the tunnel, I can see a light now, even though I have just been Sequestrated.

lightbodyae55

I was getting a bit confused for a moment there as the thread was started by Bitesized.

I think looking through the internet is a bit like buying tiles. After the 3rd shop it all begins to look the same. The other problem as you say, tends to be conflicting information from companies mostly based down South who regularly confuse IVA's with Trust Deeds.

The forum is a good place for advice as well as other sites like the AIB's site and the associated Scottish Government sites, although the advice will always be general & not specific to your own circumstances. Once you have a decent understanding of the options, the best advice is always to sit down and talk through the pros and cons of each and then make a decision based on what best suits your circumstances.

Mark

Hi Hoopsah,

If you feel like you are in a dark place at the moment then I think it's best that you receive advice sooner rather than later and not wait on someone to call you back. I fear that the ÔÇ£call backÔÇØ may never actually come.

I would say that one of the differences between using the private v free sector for advice is speed of service. In the private sector we have the resources to speak with someone almost immediately and begin giving them advice to help put their mind at ease but unfortunately for many of the free sector agencies this just isn't possible. I'm aware that many of them have a waiting time of 2-3 weeks just to see the money advisor.

The free sector are only able to set up a Debt Arrangement Scheme for you or to assist you in completing a Sequestration Application which then either the AIB or a Trustee would deal with. When it comes to a Trust Deed the free sector will normally provide you with a list of Insolvency Practitioners to speak with.

If you could give us a little more information regarding your circumstances then we can give you some general advice. If you could tell us how much debt you have, how much you feel you could pay per month to a plan after you have paid all of your bills and also if you own any assets such as a car or house. Also, is there anything that is particularly worrying you at the moment?

Lightbodyae55 ÔÇô Thanks for the positive feedback and for taking the time to come onto the forum and for providing some useful advice to Hoopsah especially with the extremely difficult time you are facing at the moment. How are you managing with everything?

Hi David,

Thanks for your response.

I said I was confused by the amount of companies that seem hell bent on getting you to sign up but have no history to look at.

I checked out your own company Wylie & Bisset and you have horrendous reviews - first few hits on google are all badmouthing your company??

Even more confused now!!