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Scottish Trust Deed Forum
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Topic starter
25/02/2015 11:53 am
Hi all, I'm looking for some advice regarding my situation and whether a Trust Deed would be for me.
I did talk with a friend who suggested I check this website out and advised that I should look into a Trust Deed but wasn't sure if it would be for me or if I would be eligible.
I currently have just over £14000 debt.
I had set up arrangements with creditors to pay back £1 a month till my work situation changes, apart from council tax arrears which I was paying £8 a month as I had a charge for payment and asked for time to pay which was accepted.
All was going well till 6 months ago when my work situation changed and I've since then struggled to maintain payments and have missed payments including payments to priority creditors. As a result of this I have had a £25 court order fee taken from my bank balance but not sure what it's about. I'm living with parents at the moment but not receiving mail here, my parents (both with a lot of health problems) had a visit from a representative from a debt collection agency regarding one of my creditors, the rep wasn't very polite and it did cause a lot of distress for my parents. I've since then had all mail sent to another relatives house but not all my mail has been getting forwarded to me and some of it has been going missing. I've checked my credit reports with all 3 credit report providers to try and see if there was anything on them regarding the Court Order Fee but there was nothing on them, my credit reports actually look good considering the debt problems I have.
I've also had to take my car off the road which has had an impact on my income.
I've been self employed since 2006 and the business was good at one time but the last 3 years it's just steadily gone downhill (apart from a late filing fee I have no other business debts).
I've been working 80+ hours per week and have reduced my total debt by about 70% but I had a drop in income about 6 months ago which has had an impact on payments made to creditors. I have been looking for full time work locally but so far I've been turned down for every job. I have however been offered jobs that are either 100 to 200 miles away or in Europe (I've worked with the company in Europe before). I unfortunately can't afford to relocate or I'd be in a full time job today. I've been on a housing waiting list in the area I've been offered work for over 2 years and so far have had no offers of housing. My parents own a house which they will soon be selling and have offered to give me a lump sum from the sale of the property to assist with settling all
I did talk with a friend but they did admit that they didn't know much about debt problems although they said I should look into either asking creditors for a payment break of 6 months to a year, a trust deed or bankruptcy.
Asking for a payment break of 6 months to a year sounds ok as I've been offered a lump sum from my parents to help with my situation but it could be up to 6 months before I receive it. There would be enough to settle all my financial problems and relocate to get myself back into full time work. My concern is that my creditors will refuse a payment break and take me to court or bankrupt me.
Trust Deed - Also sounds like a good idea but because my income is small. My income varies from month to month but since moving back in with my parents I have a disposable income of £50 to £100 a month. My fear is that this would not be enough to secure a Trust Deed.
Bankruptcy - I am currently considering this now but I feel that as I've worked had to pay off about 70% of my debt then I would have done a lot of hard work for nothing, I think I need to take advice regarding bankruptcy.
The questions I have are:
1. I've had to move back in with parents to make things financially easier but can't receive mail here, would it be ok to receive debt related mail to a mailbox?
2. I've been offered my fathers old car as he will be buying another soon, he's also offering help with insurance, I'm not sure the exact value of the car but others the same model, year and condition are being advertised anywhere between £600 to £1300 (although the more expensive ones seem to have been advertised for a long time). Would the car be taken off me as part of a Trust Deed or bankruptcy? I need the car for business and also need it to help family out, when I eventually go back to full time employment I will need it for commuting.
3. I've been offered money in 6 months time to settle my debts in full and move to go back to work full time, if I were to have a Trust Deed or go Bankrupt how would this have an impact? Could I still settle the debts before a Trust Deed or Bankruptcy ends?
4. It's my understanding that a Trust Deed or Bankruptcy will affect my credit file in a major way, later in the year I hope to be moving away to go back into full time work and it looks like I will be renting privately. Will this affect whether I can rent privately or not?
5. If I was to explain my situation to my creditors and tell them that I can settle in 6 months, how likely would they be to allow me a 6 month payment break? I'm guessing there's no chance of it happening but would like to hear from someone with a bit more experience of these things than me.
I would appreciate any advice and I'm sorry for a long post, I'm not that good at writing these things.
Topic starter
25/02/2015 12:00 pm
I'm not sure if it's relevant or not but would also like to add that apart from a dead car (local scrap mans offered me £180 for it) I have no assets or savings.
25/02/2015 12:24 pm
Welcome to the forum Dave5000.
I'm sorry to hear that you find yourself in this tough position.
In terms of your questions:
1 - I'm not sure there's any reason why your mail cannot be sent to a mailbox of some type. Creditors might have a realistic expectation of having your residential address on file as well, even if they're not writing to it.
2 - A car for which you have a reasonable need and which is valued at less than £3000 is highly unlikely to be threatened in bankruptcy or a trust deed.
3 - If you're bankrupt or in a trust deed and you come into money you'll need to hand it over to your trustee. They'll use it to cover the arrangement's fees and to repay your creditors.
4 - We've very rarely heard that someone is totally unable to rent privately because of a trust deed or similar. However, you'll understand that some individual landlords would choose not to rent to someone in these circumstances.
5 - Creditors might allow a payment break. However, if you can afford to pay them between £50 and £100 per month then you probably should do. This would also make it more likely that they'll grant you some breathing space to put more permanent arrangements in place.
With all of this in mind, what are your thoughts?
Qualified Debt Adviser & Forum Administrator - Ask me anything about Trust Deeds 
25/02/2015 1:15 pm
Hi Dave5000
TDA has answered all of your questions.
From reading this forum over the years I would say the following:
I would bear in mind that if you enter a TD or Bankruptcy and your parents give you a lump sum, there will be fees on top of the debt amount. So your £14,000 debt could easily become £3,000-£4,000 higher depending on your Trustees fees.
You would be allowed to keep the car as it is registered in your father's name and as TDA states it is below the £3,000 threshold figure.
I rent privately and went through a company once. I had to get a guarantor but they still rented to me. I'm sure your parents would be able to help you out if that situation arises. I now rent privately and didn't have to pay those pesky admin fees!
Asking for a 6 month break ÔÇô I don't know how that will go down with your creditors but if you can continue making the £1 a month payment and keep them updated of the situation, you never know! They may be happy to wait and get all their money rather than you enter a TD and only get a percentage of what you owe.
I hope you get the situation resolved quickly and to your satisfaction.
25/02/2015 3:15 pm
Hi Dave5000
I think the posts from TDA and Neverendingstory pretty much sums things up.
In terms of options, it's likely creditors will accept ongoing payments until you are in a position to settle. I'm not sure that they would accept no payments for a 6 month period though. Depending on the size of the debt to Council Tax, they can certainly fast track a bankruptcy petition, although other creditors take far longer.
In terms of the Trust Deed I suppose this would depend on the realistic ability to gain employment in the future. There would be nothing to stop a proposal being made at a reduced payment, to increase when employment improves. Alternatively your parents could make an agreed payment as third parties and you take over the contribution payment when you have gained employment and things settle. There would be no requirement for your parents to pay the debt amount, plus interest and charges.
Sequestration also remains an option even at this stage as this will increase to 4 years on 1st April. It would allow for the debts to be dealt with and matters could be reviewed once you gain employment in the future.
I hope this makes sense.
Mark
Mark is not posting regularly in the Trust-deed.co.uk forum.
25/02/2015 5:26 pm
Hi Dave5000
As others have said, there's a good chance that you will be able to buy some time by making small payments for a few months.
Usually if someone has little/no assets and low disposable income then sequestration would be the likely way ahead. You could go down this route and your parents would not be expected to contribute.
Is there anything in particular that worries you about the prospect of bankruptcy?
Scottish Debt Solutions Expert - Ask me for help setting up a Scottish Trust Deed or Debt Arrangement Scheme plan.
27/02/2015 9:27 am
Hi Dave5000,
It sounds like you have faced a really tough time over the last couple of years trying to earn enough money just to live never mind pay back your debts.
I say this to everyone - the positive thing to remember is that you have solutions to help you deal with your debts it's just working these out and picking the one you feel best suits your circumstances.
Depending on your circumstances you could consider Sequestration. This would allow you to pay back what you could afford to pay without having the pressure of dealing with your creditors and trying to earn as much money as you can to pay them back. As others have said this is only based on you and your parents would not be expected to contribute towards this.
If you cannot afford to make a contribution then you would not be required to make one and depending on your circumstances you could be discharged in either 6 months or 1 year. There really isn't anything to be intimidated by regarding sequestration. It can be a very simple and straight forward process.
It's certainly worthwhile sitting down with an advisor to discuss your situation and look at all your options.
David is not currently posting in the Trust-Deed.co.uk forum
