I should have added my partner has debt of her own which she is managing to pay (just)£3000 to which she pays about£250 a month.

Welcome to the forum Obanite. This must be very stressful indeed for you. You have done the right thing in seeking advice, though I can see how it must be confusing for you still if you have been given two different answers. I hope we can help you find a way through this.

Are you saying that you think you can only afford to pay around £150pm to your debts? If so, then a DAS would not seem to be a suitable option for you because it would take a very long time to clear the debts at that rate (almost 19 years) and is not likely to be accepted by your creditors.

Or are you saying that once you have paid your debt payments then you only have £150 left to go towards your living costs? if so, how much do you think you can reasonably manage to pay to your debts - did Stepchange help you to work this figure out?

I suppose if you were able to release some of the equity from your home by remortgaging then this may help to resolve the issue. Have you looked into whether this would be possible/affordable for you?

A Protected Trust Deed may be an option. This is usually where creditors agree to write off a large part of the debt owed to them as long as you pay what you can afford for 4 years and also make any significant assets that you own available to go into the pot to repay the debts too.
In your case, given that you wish to protect your home, your proposal would have to be made on the basis that your creditors are being asked to agree to write off much of the debt owed to them despite you not selling your property. It is a more difficult proposition to get agreement to but may be worth a try given that you probably don't have many other viable options.

Is your home adapted to meet the needs of your disabled son and would it cause a lot of problems for him if you had to move?

Hi obanite and welcome to the forum.

As Kevin has advised you have done the right thing seeking advice and help to deal with the debts that you have. You will find a lot of support and help on the forum.

The positive thing is that you will have a solution to help you deal with your debts but it's finding out which one best suits your circumstances and can have as minimal disruption and impact on you as possible.

The way I see things is you have 3 options that you could consider:

1 ÔÇô Release equity from your property. From what you say you may have around £28,000 of equity. You could speak with an Independent Financial Advisor about the possibility of releasing some equity which you could then use to pay off some of your debts which may leave you with a more manageable amount to pay. This would obviously mean an increase in your mortgage payment/term so you would need to look at this option very carefully to really see the benefit.

2 ÔÇô Debt Arrangement Scheme. As Kevin has already suggested this could be an option for you but it would depend on the amount you could reasonably afford to pay each month. This plan does not take into account your property and therefore this would not be at any risk (providing you maintained your mortgage payments). Ideally it's suggested that the plan shouldn't run longer than 10 years but there is no maximum timescale. It all comes down to what the creditors would accept. If they do not accept an offer then the Accountant in Bankruptcy (Scottish Government) can review your plan and carry out a ÔÇ£fair and reasonableÔÇØ test. They do have the power to reject a creditor objection and allow the plan to continue if they think the repayment amount and timescale is ÔÇ£fair & reasonableÔÇØ. To keep the plan around the 10 year mark you could be looking at a monthly payment around £284 per month. Affordability wise this could be a problem for you.

3 ÔÇô Trust Deed. This is an arrangement whereby you make a monthly payment for 4 years but your property is included and can be at significant risk if you do not maintain the monthly payments or default on the arrangement. If you do have a property and it has equity then a number of firms (mines included) will propose that you extend your Trust Deed by 1 additional year to pay over a proportion of the equity making it a 5 year agreement in total. If your Trust Deed proposal is accepted by the creditors and protected by the Accountant in Bankruptcy and you maintain all 60 payments then you would be debt free at the end of 5 years. The risk is however that should your circumstances change during the period or you cannot maintain the payments your property could be sold. The less equity you have in your property then the less risk there would be so it's worthwhile establishing this.

I think the best way for you to proceed is to speak with a qualified Expert to explore all of your options. They should carry out a valuation of your house and establish what your mortgage balance is. That way you will then know exactly how much equity your property has and what your options are along with the risks. It could be the case that your equity is not as much as you first thought and therefore the risk could be a lot less. A good Expert will also work through a very thorough income and expenditure with you to see what you can afford to pay to a plan per month and to ensure that you have enough money left over to live on.

I would always suggest using a firm who have an office in Scotland and that you can meet with in person to explore all of your options. I always believe doing things face to face really helps people to understand things a lot better. I travel all over Scotland meeting with people to explore and discuss their options.

The main thing you want to ensure is that whoever you speak with outlines all of your options fully, in a way which is easy to understand and with the associated risks. If that happens then you can pick the option that best suits your circumstances.

Sorry i don't know how to reply to each post individually but thank you for the replies.I have tried to release equity in the house many times but was rejected on affordability,my own bank did let me remortgage strangely enough to a lower rate after a lot of persuasion.My currrent mortgage is £350 fixed for two years was £380 on an offset.I have been reading about the Das all last night and i think could afford £284 if that is all they would take.Right now i havent missed any payments but feel we have a horrible existance as these credit cards dont seem to go down.My credit rating says everything is all good but it is not and no one will let me consolidate or give me a balance transfer card so iam running out of options.If i applied for a Das or trust deed and it didnt go through would i be permenately blacklisted.iam worried sick that if the only option i had was to sell and then no one would give me another mortgage me and my family would be homeless.
thanks again for replying.

Hi obanite,

If you have only spoken with your bank about a re-mortgage is may be worthwhile speaking to an Independent Financial Advisor about it as they cover the whole of the market. Using a bank they will only tell you about their products. It might come to nothing but at least you have looked into it.

When I quoted you the £284 this was based on dividing your debt by 10 years to give you an idea of a payment. An Expert would need to work through a very thorough income and expenditure to ensure that you give yourself enough to live on and support your son. Working out a suitable payment per month is key to sustainability and making sure a plan works. Sometimes people over anticipate what they can afford as for years it has been robbing Peter to pay Paul scenario. As an advisor I don't want to set up a plan for a client that in 6-12 months they cannot afford to pay.

A good knowledgeable Expert with experience in dealing with Trust Deeds and Debt Arrangement Schemes will be able to give you an idea if your DAS or Trust Deed would be accepted by the creditors.

In a Trust Deed creditors generally consider a numbers of things such as the level of monthly payment, your income and expenditure (to see if this is excessive), past spending history, the level of fees that a company charge and the overall return that they will receive at the end of the arrangement. I have experience in proposing Trust Deed's to creditors whereby we are not going to realise the full amount of equity and we haven't yet had a problem. As I said, the smaller your equity the less risk to your property. Often people over estimate the value of their house and it's actually less than they think.

In a DAS, it's similar in terms of payment per month, financial statement and the overall timescale it will take for the repayment of the debt. Past spending history can also be a factor but for the majority of people this isn't an issue. The benefit of the DAS as it doesn't take into consideration your house.

If a DAS or Trust Deed is not accepted then your options are really limited to what you can do to deal with your debts in a reasonable timescale and in a manageable way. Alternative options are to consider a sale of your house which is in no way ideal or perhaps an unregulated debt management plan. All of these options you would need to give serious consideration too. Very few Trust Deed's or DAS are rejected and as I said a good advisor can give you a good indication of the likelihood of either plan being accepted before you proceeded with it.

This is why it's vital that you sit down with an Expert who can look at your full financial circumstances, establish what your options are and then you can decide on the best way forward. Kevin or I would be happy to help you with this.

You certainly wouldn't be permanently blacklisted by seeking to set up a Protected trust deed or DAS, Obanite.

It is important to do this in the right order really and to talk about how options are likely to work or how many years they might take is really putting the cart before the horse.

The first thing to do is to go through you financial situation with an expert, such as one of the advisers on the forum here or a debt adviser at your local free sector advice agency. How your income and outgoings breaks down and what is left over is crucial to determining what options you may have. Any questions you may then have about your specific situation can be answered a lot more accurately and hopefully you will then be able to see a way forward other than the neverending pattern of payments to credit cards that you are currently stuck in.

Sorry to keep asking questions but a thought just entered my head,if for some reason i came into money or my circumstances changed somewhat whilst in a trustdeed or a DAS would i be able to come out it midway or is it for the duration sos to speak.And can i ask if iwas in a DAS or Trust deed if i managed to up my income by say a couple of hundred a month through extra work who would that impact things.Right now i must be paying out about £800 a month or maybe slightly more to those cards,iam to scared to look.

Hi obanite,

Don't worry about asking questions, that's what the forum is for. Ask as many questions as you like.

In a Trust Deed the arrangement can only be brought to an end early if you are able to repay your full debts plus interest and any other costs. If you are able to increase your income all this would mean is your monthly payment may increase but it wouldn't reduce the timescale from 4 or 5 years.

In a DAS it its more flexible in terms of you have control if you want to come out of the plan if your circumstances chance and you can pay off your debts. Also, if your income increases and you can increase your payment this would reduce the timescale are you are paying more money in.

Do you think your circumstances could chance during the next 4/5 years in terms of inheriting assets etc? How safe and secure do you think your job is? These are all important factors when looking at your options.

It can seem scary and daunting when you actually sit down and work out how much your paying per month to your debts. The benefit of one of the plans is this should reduce and make it a little more comfortable.

That's a lot of money going out to service those cards, Obanite. What we need to do is to work out what your living costs are without those payments included so that we can calculate what money you can realistically afford each month. If it turns out you can afford several hundred pounds each month then a DAS might seem to be most suitable for you.

quote:

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Originally posted by David Tannock
[br]Hi obanite,

Don't worry about asking questions, that's what the forum is for. Ask as many questions as you like.

In a Trust Deed the arrangement can only be brought to an end early if you are able to repay your full debts plus interest and any other costs. If you are able to increase your income all this would mean is your monthly payment may increase but it wouldn't reduce the timescale from 4 or 5 years.

In a DAS it its more flexible in terms of you have control if you want to come out of the plan if your circumstances chance and you can pay off your debts. Also, if your income increases and you can increase your payment this would reduce the timescale are you are paying more money in.

Do you think your circumstances could chance during the next 4/5 years in terms of inheriting assets etc? How safe and secure do you think your job is? These are all important factors when looking at your options.

It can seem scary and daunting when you actually sit down and work out how much your paying per month to your debts. The benefit of one of the plans is this should reduce and make it a little more comfortable.

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The reason i asked is that i can acquire some agency work which would help me pull in another £250-£350 i tried it a couple of years ago but the benefits my partner receives ie tax credits were cut by £40 a week i thought what is the point and the debt were not going down at all because of the interest anyway.I feel trapped no matter what way i turn.

Hi obanite,

I wouldn't feel too trapped by things as you have a couple of options that you can consider to help you deal with your debts.

Doing extra work/hours can be of assistance but in circumstances like this I would always advise a client to consider this carefully as is it something which they can maintain for long periods of time. I think it's about finding a balance between work and family life. If you are able to work your normal hours and pay a payment to a plan which is acceptable to your creditors and you are happy with then this would be an ideal scenario rather than constantly working and doing extra shifts.

As we have advised this is why it's important to discuss your circumstances with an Expert as they will be able to go through all of this very thoroughly with you. I'm pretty confident that in the space of speaking with an Expert for 45 minutes you will be in a better position to understand what your options are and probably start to feel a little better.

Every one feels the same as what you do to begin with, they have the same concerns about their assets, how much they need to pay and if creditors would accept their plans but in the vast majority of cases the proposals are accepted by creditors and very quickly those concerns disappear and you regain control.

Can i ask is your company affiliated with Scottishtrustdeed.co.uk.

Hi obanite,

No my company is called Wylie Bisset Chartered Accountants. We have no affiliation to that company.

If you are using them for advice I would ask if they will handle your case themselves of if they would pass you to another organisation. You also want to ensure that the Expert you speak with is the same person that will handle your case from start to finish for the duration of your plan. I work on the basis that I'm the Expert that gives you advice, handles your case from start to finish and I'm always your main point of contact. I'm think Kevin and his firm work the same way as we do.

I should have also said that to read more about Kevin or I you can click ÔÇ£see my profileÔÇØ underneath our posts which you can read to find out a little more about the both of us.