Welcome to the forum arab6767.

Congratulations to you on taking effective steps already to deal with the gambling issue.

The situation regarding equity in houses has been a bit of a hot issue here for a little while.

Some firms have taken an approach whereby, with disclosure to creditors at the start, the equity in a home isn't directly brought into a trust deed. This has some similarities with how IVAs work (in the rest of the UK) where equity has been dealt with a bit more flexibly for some time.

There may well be a significant risk attached to this though. For example, if someone entered this type of trust deed and then became unable to make their payments for some reason, the home might be put at risk of being sold.

Hopefully David and/or Kevin can add some comments here about how their respective firms work with clients that have equity in their homes in due course.

You may also wish to read the following page about equity in a home and Scottish trust deeds:

https://www.trust-deed.co.uk/equity-homeowner-house.html

Hi TDA,

Thanks for your reply.

The reason I ask is that as the debts are all mine and its me that's been so stupid. However my main objective is that, even if myself and my wife split up over this, she keeps the house. I know this could get complicated
however just looking to get an idea how this would work.

If I have to use all of the equity from my share then the mortgage may be too much for her alone.

I think the practical issue arab6767 is how you'd get hold of the equity at all.

Do you think your wife earns enough to be able to obtain a larger mortgage on her own to release your equity for example?

She earns enough to take on the current mortgage herself I would think but probably not to get a larger mortgage.

I'm worried she would have to then sell the house to release the equity? Would this happen?

Hi arab6767 and welcome to the forum.

Well done on reaching out for help and advice. This is often the hardest step to take. You will receive plenty of advice, support and help on the forum.

How accurate is your estimation of how much equity there is in your property? Regularly I speak with people and they always over estimate the value of their house and don't really know what their mortgage balance is.

When it comes to providing a client with advice on all of their options we would carry out a free valuation of your house and ask that you obtain a redemption figure for your mortgage. By doing this we then know how much equity your property has and what options you have available and the pros and cons of these.

As TDA has advised equity has been a hot topic recently and the Scottish Government has recently issued some guidance on this.

When it comes to equity we will balance up all of the variables I.e. How much equity you have, is your home a "family home" can you secure a re-mortgage to release some of the equity etc. A very important factor is the level of your debt. A Trustee needs to strike a fair balance between the individual and the creditors but also trying to maximise the return for creditors.

At the end of your 4 year Trust Deed you can extend your payments to pay over a reasonable proportion of the equity that is in your property. Can you do this over a 1 or 2 year period. Any non standard agreement needs to be properly explained to the creditors to allow them to make an informed decision. A non standard agreement is where the Trustee doesn't realise the full equity but there can be good reasons for this.

Based on your debt level of £55,000 if you entered a DAS paying £300 per month it would take approximately 15 years to repay.

In a Trust Deed you could consider this over a 5 or 6 year period and this could well be accepted by creditors. It can difficult to obtain the full amount of equity out of a property and there are a number of issues to consider. These could be marketing costs, legal costs, also legal costs should the other person not want to sell the house etc.

As TDA also pointed out if you did enter a Trust Deed and then failed to co-operate or maintain your payments then the house could be at risk.

I think the best thing to do would be to speak with an Expert about your circumstances. They can work out exactly how much your equity is and then provide you with advice. Kevin or I would be happy to help. In scenarios like this I always think it's best to actually sit down face to face with an Expert to discuss everything. If you then proceed you need to make sure you receive absolutely everything in writing.

I hope this makes sense - I'm currently on holiday at the soft play looking after my 2 year old son and trying to post using my phone.

Thanks for replying David, especially as you are on holiday.

Yes it is a family home which is making things even worse.

So for example if it was carrying on for an extra year would the extra year be paying a different amount or the same amount you'd paid the previous 48 months? Obviously dependant on the agreement of creditors. Just trying to get my head around some of the possibilities as a couple of days ago I couldn't see any hope at all.

I just presumed that the trustee would require to take all of my equity which would be a disaster for my wife and family.

Hi arab6767.

I think any such proposal would be based on continuing to make the same contribution to the trust deed - though of course this may or may not change alongside your financial circumstances in the future.

Hi,

Your welcome. It is actually a little addictive helping people with their debt worries/problems.. My wife does sometimes remind me that I'm on holiday but I can't help it. I always think how people must be feeling worrying about this when a quick response from us can really help them.

Ideally you would need to maintain the payment that you were paying to the Trust Deed. Effectively the more of the equity you are able to pay over at the end of the 4 years the more chance of the proposal being accepted.

In addition to extending your monthly payments at the end of 4 years you could also have a third party ie your wife make monthly payments along side yours for the equity during the first 4 years. This could avoid having to extend it beyond the 4 years.

There are a number of scenarios and ways in which this can work. The best way to narrow this down for you and be specific is to verify your equity. I can normally have a valuation carried out within a matter of hours as this isn't an internal one but a desktop one. If you are able to speak with your mortgage provider and obtain a settlement/redemption figure then we could clarify and confirm exactly the equity and how this would work by this time tomorrow for example. This could really help put your mind at ease.

Like you said a couple of days ago you felt like you didn't have any options with no way out. Now we may be able to secure a Trust Deed and have you debt free within a manageable timescale. That's the real positive here.

Another important step is to work through a very thorough income and expenditure with you as this is how we determine your monthly payments. Your monthly payments should always be based on affordability and you are allowed to pay all of your reasonable household bills and living costs.

As I said try to stay positive, there are a number of plans available to help you.

Hi arab6767. As david has suggested, there is often a viable way forward as long as the equity in your home isn't too high. Judging from the figures you have given I'd be optimistic that a Trust Deed might be possible. The fact that you can afford a decent monthly payment certainly helps with that.

It is pretty difficult to talk in generalities on a public forum though and it really does boil down to calculations based on the specifics of your situation, which can only really be done properly by speaking to you. Please feel free to get in touch with any of us via the site and we can give you better advice on your options.

One thing it is important to stress is that valuations etc are done before you sign anything, so the exact amount and term of the payments required to deal with equity can be nailed down - and there is no obligation to go any further if it doesn't suit you after all.

Thanks again for all your replies. I've been scanning forums all day and feeling a little more positive than I was and will probably be in touch soon. Don't think I have any other option to be fair.

Only other question for now... when the trust deed ends can the trustee ask for more money if the value of the property is higher? Just been reading some horror stories on a different forum of people being asked for an extra £15k at the end of their trust deed.

Since November 2013 the amount of equity has to be calculated at the start of the Trust Deed and an agreement made as to what will be required to be paid in and by when. This is binding on all parties, so the only way the figure should change would be if the person didn't stick to the agreement made.
Perhaps the horror story you read related to a Trust Deed signed before the regulations changed.

Hi,

You will find some horror stories on the forum as the natural thing about forums is they tent to attract people who have experienced a problem and looking for advice. There are thousands of Trust Deeds successfully completed each year which you don't hear about because they have run smoothly and without any problems.

Like Kevin has advised with the change in legislation the equity is agreed at the start on a statutory form called Form 1B - Agreement in Respect of Equity in Property. Both the individual and Trustee sign this at the outset. This confirms the amount of equity and how this will be paid over. Makes it nice, simple and easy to understand.

Trust Deeds have come a long way in recent years and providing they are set up correctly they can be an extremely effective way of clearing unmanageable debts and allowing you to regain control.

Have a browse on the forum, read other people's stories and experiences and then take it from there.

Hopefully your feeling a lot better about things

Thanks guys,

Needless to say it was on a different forum and was from 2009. Maybe should've checked the date.
I will have to speak to my wife and figure out where I go from here.

Thanks for all of your help today.

Ah that will be the reason then! I've done that before on forums and realised its years old the advice.

When there are two parties involved like this it's normally easier for everyone to sit down together and discuss things. I'm sure your wife will have questions herself about things and need reassured. Sometimes it's tricky for you to answer these and give her the reassurance.

Your welcome. It's what we are here for.