Hi lele2316 and welcome to the trust deed forum.

"Insolvency" is the usual descriptive term for measures such as bankruptcy or a trust deed. Bankruptcy and trust deeds are different things, but both are forms of insolvency.

A credit record is an individual thing. If you start a trust deed it will not directly affect the credit rating of your partner.

However, if your credit records are "linked" (perhaps because you have a joint current account, or a joint mortgage for example), a trust deed for you may affect the willngness of some lenders to advance further funds to your partner (though it will not directly affect his credit record itself).

Assuming that you already live together, there is no reason for your trust deed to make any difference to him if you were to marry during it.

Are you homeowners?

No the mortgage is soley in his name, the majority of the debt that I have is from my previous mariage that I have been left with since my ex husband has now went bankrupt. My partner and I have no debt together and the only thing that we have "linked" is a basic bank account with a debit card. No overdraft facility or credit card facility is available on this.

The joint bank account may create a credit record "link" between you lele2316.

If it's important to you, you may wish to consider setting up individual bank accounts prior to starting a trust deed (if that's what you choose to do of course).

You could then check your credit reports and, if a link remains there, file what's known as a "notice of disassociation" with one of the credit reference agencies to remove the linkage.

In terms of the home, it isn't based upon the mortgage names, it's down to who is named on the title deeds. So long as you aren't added there should be no problem in connection to the home (whether you marry or not - it isn't automatic if you do marry).

Is there a particular reason that you're inclined towards a trust deed rather than the other possibilities?

I called the debt advice centre last night and explained to them that I advised them that I have roughly 24,000 worth of unsecured debt, 20,000 of which as I mentioned before I have been left with since I divorced. The rest are in silly pay day loans which have become a huge hole for me over the last couple of months. I have recently had my third baby and my maternity pay is due to end at the end of this month and it is unlikely that I will return to work and I dont want my partner to be lumped paying back debt that isnt his responsibility. The advisor last night mentioned the other options but really if I entered into a debt management plan then I would still be paying the debt back in 8 years time and this just isnt an option. One of the debts I have been paying back for 11 years and I still owe 1400?!?!?

The debt of which has a balance of 1400 was for a car that I had to return back to the finance company after the birth of my first child. The payments every month were only for 130, therefore I cannot understand even with interest how I can possibly still owe them this amount after this length of time making the minimum payments?!

Hi again lele2316.

How would you fund a trust deed if you're not working and no longer have maternity pay?

With cars on finance, if they're returned they are often sold. Any shortfall on the selling price is owed by the person that took out the finance agreement. You may find that you're paying the "loss" of the finance company from a shortfall rather than interest alone.

When I advised the person last night he said that taking into consideration that I would still receive my tax credits and my family allowance, given the fact the my parnter is essentially paying for the majority of the household bills, this would leave me able to pay roughly about 165 per month towards a trust deed? He said that this amount would be more than likely the same if I entered into a debt management plan however this would obviously be for more than the 3 1/2 years that he is saying the trust deed would be taken out for? He mentioned something about the Scottish Government Legislation being changed 14 months ago re trust deeds and that he would advise me that this is the best course of action to take? I was confident on what he was saying last night, but now slightly unsure now that I have logged on here?

Erm... I'm not sure I would concur with this opinion necessarily, though it's hard to comment without having the full facts in front of you.

Normally a trust deed is funded from earned income.

If you don't have any significant assets there is little difference between how a sequestration (bankruptcy) or a trust deed would work for you.

However, with sequestration I suspect it's quite likely that your contribution would be little or nothing if you are receiving only tax credits and family allowance.

Also, sequestration only lasts a year. If you can afford to pay towards your debts the contributions would last for three years (not the 3.5 years mentioned to you - the extension of six months will be to ensure that the fees of the trust deed firm can be met on top of a minimum anticipated dividend to your creditors - that's because £165 per month is comparatively low to fund a trust deed).

I'm not really sure how changes to legislation make a difference here.

I'd suggest we wait and see what Mark, Kevin or Shona think as well. Debt advice can contain opinion rather than being a pure science, so please don't take my comments as necessarily being critical of the advice you have already received. Something doesn't sit quite right about it though... and I'm struggling to understand why a trust deed is your best option based on the information in this thread.

I thought it seemed too good to be true, on speaking to the advisor last night I didnt mention any expenditure only what income I would receive after my maternity pay stopped and after popping me on hold for a few minutes he came back and told me that it would work out at 165 per month and that there would be no set up fee. It would last for 3/12 years rather than the normal 3 years as I would be classed on a low income and it would take roughly 6-8 weeks to set up. I am not panicking as I have the threatning calls starting, the emails, the text messages and visits to my door, it is the pay day loans more than anything that I have got myself into a pickle with and they are not accepting any small payments until the due payment defaults and they then are adding on late fees and default fees. It is too easy to make the full payment only to take the loan straight back out again and this is leaving my in the same position day in day out?

Hi lele2316.

We hear from many people that find themselves under increasing pressure due to mounting debts. Although taking action soon is probably going to be important for you, making the right decision is going to be more much important than making an immediate decision. It's worth taking a little time to be sure about things.

So you provided no information about your expenditure, but were told that a trust deed would cost you £165 per month?

Hi lele2316

Trust Deed Assistant is correct. Please avoid the advice you have been given at all costs.

In your circumstances, sequestration is the obvious solution. The solution The Debt Advice Centre is suggesting would suit them no doubt.

There is no court involvement in sequestration and as mentioned, no contribution would be sought from benefits.

Hope this helps

Mark

I gave them no information only about the money that I would have coming in after my maternity pay stops. The seemed really confident in what they were saying, I told them that a few years ago that I was in a debt management plan with Gregory Pennington, and that this stopped when I divorced, the man I was speaking to said that he actually worked for Gregory Pennington under the Think Group and that he would advise me against a debt management plan and this trust deed is the best solution. An hour of my time wasted on the phone, and hope that this problem was solved is now gone.

Hi lele2316

I have to agree wit TDA and Mark, this does not sound like good advice based on what you have told us. To enter into a 3.5 year Trust Deed, just to meet their fee, when you are on benefits is mad. Sequestration sounds a much better option for you, although i would still advise that you meet with someone face to face. In the meantime, if you want to stop the payday loans, cancel your bank card and order a new one. It seems to be the only way you can stop them taking money from your account. If the caed details you gace them is cancelled, they will not be able to take funds from your account. In terms of your credit file, I would suggest the same as TDA, and open a seperate account from your partner.

I feel so foolish thinking that one phone call would resolve everything. Shame on the people within these companies who take someone's misfortune and try and turn it around with targets, bonus acheivements etc. How do I go about arranging talking to someone face to face? I really appreicate all of your advice, had I not come on here tonight then I would have called up the company and advised them to go ahead with the trust deed. Can you confirm if the interest on these payday loans would stop if I entered into a payment plan with them?