Have you sought advice from a money adviser about the Debt Arrangement Scheme yet, arab6767? If not then I would suggest that may be a good idea.

Your home is not taken into consideration and interest is frozen on all debts to enable you to pay them off in full, you are protected from any further action by creditors. As long as you can afford enough each month to pay the debts off within a reasonable time (anything up to 10 years would probably work) then it might be the perfect route for you.

Hi arab6767,

Have you reached out to an expert to discuss your circumstances and the pros and cons of each option?

A good expert will look at a Trust Deed, Sequestration, the Debt Arrangement Scheme, also they will look at a budget with you, see if you can cut back on your bills and also put you in touch with an independent financial advisor to see what they can do in terms of a re-mortgage or releasing equity from the property.

The reason I am asking is to completely run out the possibility of a Trust Deed for you. At the moment it feel like we are guessing at figures and it’s hard to give a definitive answer about this option. Until you speak with an expert you will only be guessing at things.

When I speak with a client I like to fully and completely explore all available options and to do this I would arrange your house to be valued and also for you to obtain a settlement figure on your mortgage. I know you say there is definitely £75,000 of equity but you have no idea how many times I’ve heard someone say this and once I’ve looked at things it’s less. Once I know exactly how much equity a person has and I have fully reviewed their financial circumstances i.e. their household income and expenditure only then can I rule out options and provide good clear advice.

In some situations what first looked like a Trust Deed wasn’t possible can actually change and mean that it is possible but people need to be fully aware of the risks involved when they have a property and equity and enter a Trust Deed. Sometimes for example a wife/husband or family member can make payments alongside the Trust Deed to pay over a proportion of the equity and this might be something that could work for you. An extension of your payments at the end of 4 years for say 2 years along with a third party monthly payment could realise a sufficient amount for the creditors and AIB to be satisfied. Again though you need to be fully aware of the associated risks of this option.

I would reach out to an expert to fully explore all your options. Until you have done that then it’s hard to rule out options. No harm is getting tailored specific advice based on your own financial circumstances.

Thanks for your replies guys.

I feel like I'm drowning tbh. Don't see how we could remortgage when my monthly payments on my credit cards are really high. Wouldn't the mortgage provider take this into account or do they not look at the monthly payments?

They generally look at the monthly payments after you'd cleared the debts for which you're releasing this additional equity. That would give them a sense of whether they're lending affordably to you.

Releasing equity to repay unsecured debts isn't popular with every mortgage lender.

Hi arab6767,

I’m not a mortgage advisor so I really wouldn’t be able to give you an idea of this unfortunately.

Everyone who has debts and is in the same position as you feels the way you are.

If I were you I would reach out and contact an expert about your situation. Kevin or I would be happy to help with this. The hardest thing is actually speaking to someone but I’m sure in the space of a phone call you will feel a whole lot better about things. I’m often told by my clients that just speaking about it helps to unload some of the pressure.

You could actually find that by the end of the week you are moving forward with a plan to deal with your debts which provides you with a light at the end of the tunnel and something to work towards.

Hi arab6767.

Your health is the most important thing, so getting some expert support seems to make sense.

I'd suggest speaking to your mortgage lender and/or a mortgage broker about that side of things. Obviously you'd need to speak with your wife about the situation first so you understand what options you may or may not be able to explore in terms of dealing with the debts this way.

I'd also suggest speaking with a debt adviser. It doesn't have to be anyone from this site or anywhere else in particular - but speaking to a trained professional somewhere will start to help you feel a little more in control. Citizens Advice, money advisers employed by your local authority, calling the Money Advice Service's helpline; all options to quickly get someone on your side to help fix this.

Hi guys, me again.

Just been reading through some other articles and threads and have a couple of questions.

I notice in one article that it says a trust deed may not be acceptable if there is more equity in your property than the total amount of debt. The equity in our house is somewhere around the £70k mark, however would the total equity be the amount worked on or just my share? The debt is a lot more than my share however less than the total equity.

Also, it says that your assets are signed over to a trustee. Is that the complete property or just my share of the equity? Could you clarify for me please?

Thanks

Hi arab6767.

In both instances this would relate to your share of any equity only.

Hi arab6767,

Yes, your share of the equity is potentially £35,000. This is what the calculation is based on.

When you sign a Trust Deed you transfer your assets to a Trustee. In my previous post I said about being careful when it comes to a Trust Deed and equity as if you fail to maintain the payments/agreement then your property can be at risk of being sold. That’s why sitting down with a qualified Expert to go over all of the pros and cons is the best way to proceed.

Once you know absolutely everything you can then make an informed decision on which option is best for you.

Hi David,

Thanks, just wanted clarification. I need to speak to my wife before speaking to yourself or Kevin in person and despite being a complete idiot getting myself into this mess, I thought it better being an idiot who has at least done a bit of research on how to get out of this mess.

You guys on this forum have been by far the most helpful of any website I've been on. All the other sites just seem determined to get your phone number right away. I guess to try and sell you their products.

Thanks again.

Hi arab6767,

Sure I understand. It might be more helpful speaking to an Expert on the phone about all of your options and then speaking to your wife. I always find that speaking about things on the phone for 15/20 minutes can really reassure someone and it always allows an Expert to properly explain things.

Also, when you do come to moving forward with things and actually meet with an Expert it could be a good idea to have your wife there also at the meeting as it will reassure her.

You are certainly doing the right think though by researching things which is what we always encourage people to do.

Quite right, arab6767 - this kind of thing is too important to be a sales process. Unfortunately I am sure there are many firms out there that see it only in these terms. I guess it comes down to using your instincts when choosing who to speak to.

Thanks guys, one more question after doing a bit more reading today.

On a "Debt Arrangement Scheme" I've read that's 10% of your payment is taken in fees. Does this mean you pay an extra 10% on top of your debt to be repaid?

Hi arab6767,

No you repay 100% of your debt and effectively 90% is paid back to the creditors and the other 10% is the fee taken by the Accountant in Bankruptcy and the payment distributor.

Also if you use a private company to set up a DAS you will be charged a monthly management fee. If you use your local council or citizens advice it will be set up with no monthly management fee and for free.

Hi arab6767, I hope you're feeling a bit better in yourself after finding out a bit more about the options that are out there [:)]

The DAS fees you're talking about come off the money that gets paid to your creditors. You don't have to pay extra to cover those fees - you'll just pay back the amount that you owe at the start of the DAS.

The creditors have to treat it as if you are paying the full amount you owe and they can't ask you to pay extra to cover those fees.

Some of the companies which can help you get onto DAS charge their own fees, which are different from the ones you were talking about here. If you go with any of those companies, you can ask them about their fees before you start.

You can also get onto DAS for free by going to your local CAB or local council money advice team, or any of the debt charities that work with DAS.

The main thing - as the experts have said - is to see if you can speak to someone on the phone or face to face to talk things over as that will help you figure out what's best for you.

Good luck with it all - you've already taken the first, most difficult steps [:)]