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Is Trust Deed good for me?

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(@freshstart)
Active Member
Joined: 15 years ago
Posts: 5
Topic starter  

Hi

I'm thinking about applying for Trust Deed. I'm Scottish resident from 5 years. Last November I've lost my job. For next 4 months I was borrowing money from my friends, spending my saveings, doing anything to get some money to cover my monthly payments. I was obligated by contract to rent an appartment, I had to pay my bills etc. After couple months I lost all I had beside my car. I wanted to sell it also, but someone hit it and run. I don't have money to repair it, or to pay insurance exces. Car is working fine, only body is scratch and bended, but value dropped down by 60%.
Right now I'm in dept with year old personal loan, bills, overdraft, credit card etc for around 14000.

Two weeks ago I finaly found new job. I also finished my conract and I'm moving out to rent a room - no bills, no council. I opened new accound with other bank. I cannceled all my directdebits on old account so no charges for rebounds will be made.

I will be earning around 850 pounds a month, with all life expences around 650.
Do you think Trust Deed is for me? Can I apply now, only 2 weeks after getting a job? If after a year in Trust Deed I will be offered to work in other EU country, will I be able to move and repay my monthly payments from there?

Kind Regards


   
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TDA (Debt Adviser)
(@tda-debt-adviser)
Illustrious Member
Joined: 16 years ago
Posts: 13594
 

Hello freshstart and welcome to the forum.

A Trust Deed certainly appears to be one of the options open to you.

If you were to move abroad during the three year payment you could continue your payments from overseas.

There is therefore nothing to stop you applying for a Trust Deed. I would suggest that you contact a debt advisor or Trust Deed professional so that they can work through your circumstances in detail with you.

By doing this they will be able to give you information on the other options available for you AND confirm exactly how a Trust Deed would work for you. By following this process, if you decide to go ahead with a Trust Deed, you will feel comfortable that you have made an educated and sensible choice.

Qualified Debt Adviser & Forum Administrator - Ask me anything about Trust Deeds


   
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(@freshstart)
Active Member
Joined: 15 years ago
Posts: 5
Topic starter  

Thank you for fast answer. I will definitely call one of advisers soon, I just want to get as much info about all my options before I do that.
Recently I spoke with my colleague at work, and he suggested that in my situation, when I already lost everything, and I only have car worth less than 1000 pounds, which I need to work, I should think about LILA sequestration. I'm earning National Minimum - 5,8 per hour. I don't have my own house, I had to sell my pc, and TV.
Can you explain me what is the difference between Trust Deed and LILA Sequestration? How much money would I have to pay every month? Can my bank don't agree on my bankruptcy? Can they force my to look for other, better pay job? (I've spend a lot of time looking for new job. Maybe wages are not great, but I'm sure I won't loose it, and maybe in future I could get rise) When would I be debt free? Is that right than for rest of my life, anything I will get, inheritance, better wage, will go to my creditors? Will I loose my dog, because I will be told I can't pay for his food or insurance?
Cheers.


   
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Kevin Mapstone
(@kevin-mapstone)
Member Admin
Joined: 16 years ago
Posts: 4253
 

Hi freshstart. A lot of questions there! I'll try and answer them each in turn...

In practice there would probably be little difference to you between a trust deed and a sequestration. In both you are required to repay whatever it is deemed that you can reasonably afford over a three-year period. Technically, you are discharged from your debts after 1 year in a sequestration, but if you are making contribution payments from your income then they carry on for another 2 years after that. The other main difference is that a protected trust deed is set up in agreement with your creditors, whereas they cannot reject a sequestration. If a trust deed fails to achieve protection (ie get accepted by enough creditors) then usually sequestration follows instead.
Nobody would force you to look for another job. It is not true that anything you get for the rest of your life would go to your creditors - merely until you a discharged from the trust deed or sequestration.
Reasonable costs for pets are an allowable expense in both procedures too so don't worry about losing your dog.

Hopefully I've covered everything there and things make a bit more sense.

Scottish Debt Solutions Expert - Ask me for help setting up a Scottish Trust Deed or Debt Arrangement Scheme plan.


   
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(@freshstart)
Active Member
Joined: 15 years ago
Posts: 5
Topic starter  

Thank You Kevin. That's what I was looking for. Clear, straight answears. VERY HELPFULL.

I still no getting this diffrence between 1 and 3 year discharg at LILA Seq. What "technically" means? That some amount of wages still will be deduct, but my inheritance cant be reposesd after a year?
I understand that there is no diffrence between trust and Lila if it comes to rise in earnings. 80% of overtimes is taken away, and if you earn more, you pay more.
Thanks to trust deed your interest is being frozen. How about Lila?
In trust deed your trusty is company you choose, who is in Lila?

If sequestration comes after trust deed, what' s worst in it?

What is diffrence between normal sequestraction and lila?

I will be very greatfull for your answears. You'r literally saving my life.


   
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TDA (Debt Adviser)
(@tda-debt-adviser)
Illustrious Member
Joined: 16 years ago
Posts: 13594
 

Hello freshstart,

In sequestration you will be discharged after a year. This means you are no longer subject to the restrictions of a bankruptcy. However you will still be expected to pay what has been calculated you can afford towards the debts for a further two years (three years total; like a Trust Deed normally is).

In both arrangements interest would stop.

Your Trustee, in a Trust Deed, is the person at the company you choose who is personally responsible for your case (they are an "Insolvency Practitioner").
For LILA sequestration you would approach the "Accountant in Bankruptcy" who will handle things from there. There is more detail about this on the menu on the left hand side of this page.

In practical terms for you, based upon your circumstances as you have described them, there is no difference in the effect upon you between LILA sequestration and sequestration. LILA seems to offer you an easier route to sequestration if this is the route that you choose.

Are you expecting an inheritance soon?

Qualified Debt Adviser & Forum Administrator - Ask me anything about Trust Deeds


   
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(@freshstart)
Active Member
Joined: 15 years ago
Posts: 5
Topic starter  

Hello,

Thank you for answers.

Im not expecting inheritance soon, but maybe in next 2-3 years. What would happend if in this time I would get private property?


   
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Kevin Mapstone
(@kevin-mapstone)
Member Admin
Joined: 16 years ago
Posts: 4253
 

If you were in a trust deed then that would be classed as "acquirenda" and you must inform your trustee - they would then have to gather in the value of the property for your creditors.

In a sequestration it is different as you would normally be discharged after 1 year, so even if you were still paying a contribution from your income for another 2 years, any accquirenda such as an inheritance after your discharge would be yours to keep.

Having said that, a trustee in a sequestration is able to apply to the court for your discharge to be delayed, so may try to do so if they are aware that a lump sum/property is likely to be coming your way in due course. In practice I am not sure that a sheriff would grant this - I guess it might depend on how certain it is that this inheritance would become yours and how soon after discharge is due.

Hope this makes sense - a bit of a complicated answer I know!

Scottish Debt Solutions Expert - Ask me for help setting up a Scottish Trust Deed or Debt Arrangement Scheme plan.


   
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(@freshstart)
Active Member
Joined: 15 years ago
Posts: 5
Topic starter  

Not complicated at all. Thank you very much. You are very helpfull.

Last couple questions, if I may.:-)

Do I have to be UK citizen to get LILA Seq.?

Can I start this procedures now, or have to wait for some action from my bank? I'm late with 2 payments.

As I recently started new job, I was granted 300 pounds tax return. Do I have to give it to my bank, or can I repay my friends?

Thanks again.


   
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TDA (Debt Adviser)
(@tda-debt-adviser)
Illustrious Member
Joined: 16 years ago
Posts: 13594
 

Hello freshstart,

I believe that you need to be resident in Scotland to qualify for LILA. The experts may correct me if I am wrong, and you could also call the Accountant in Bankruptcy to double-check this.

You do not need to wait for any bank action. You can get the process underway by contacting the Accountant in Bankruptcy.

I would suggest that you ask the AIB how you should deal with the ?รบ300 tax refund. Using it to pay one creditor rather than another might not be a good idea for you at the moment.

Qualified Debt Adviser & Forum Administrator - Ask me anything about Trust Deeds


   
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