Hi Claire123 and welcome to the forum.

Sorry to hear that your Trust Deed has not been accepted by the creditors.Try not to panic too much right now, I'm sure we will be able to come up with alternative solutions.

Did your Trustee give you a reason why it's not been accepted? We work to a set criteria and can normally give a client a very good indication before they enter a Trust Deed if we think there will be any problems.

Can you tell us a little more about your situation i.e. How much debt you have, if you have any assets and how much your monthly payment to your Trust Deed is?

Running with an unprotected Trust Deed doesn't offer you any protection and for that reason it's not something that I would really recommend.

Sequestration can sound a lot worse than it actually is. It can actually be a very straight forward process but for most people it's the stigma and fear of the unknown. Generally it has the same impact on your credit rating than a Trust Deed does. No one comes to your house to look at any of your household possessions. You still control your bank account, pay all your bills as you normally would etc. It actually runs pretty similar to the Trust Deed. Also, no one finds out about it.

What is it about Sequestration that worries you?

There could a third alternative which is where your Trustee releases you from your Trust Deed and you sign another Trust Deed with a new company. I'm currently working with a client and another company at the moment whereby as a result of the fee the company charged to do the Trust Deed the creditors were not happy with and rejected the proposal. Some creditors are represented by one company and their fee structure is difficult to make work for Insolvency Practitioners.

Our fee structure is slightly different and therefore we can facilitate it. If your Trust Deed was rejected because of fees charged then this may be an option. Sometimes however unfortunately companies can only reduce the fee which they charge to a certain level before it does not become cost effective to facilitate a Trust Deed.

You want to be careful about asking a family member to take out a personal loan for you to then pay. Your circumstances could change in the future and that could mean you can't pay the loan and it then puts pressure on that family member. I've seen that happen a lot of times and it can cause issues. If you did do this you also want to pay attention to how much you would borrow and how much you would pay back in interest.

Try to stay positive. It might not feel like it at the moment but there are alternative solutions available.

The problem with an unprotected Trust Deed is that the creditors who rejected the proposals don't have to write off the debt at the end and could potentially take action against you at any time in order to jump the queue. They really aren't very effective if not protected.

Did the insolvency practitioner you dealt with not mention the Debt Arrangement Scheme as an option? This would enable you to repay your debts in full over time at a rate you can afford. However, it would have to be a viable timescale - if the debts are going to take a long time to repay then it might not be possible (or desirable) to set this up. If you can provide more information on your debts and how much you can afford them we can advise you better.

Thank you both for help.

Family member tried to take out loan/s last night and sadly all were turned down. Strange as he has a good credit rating? Will look into getting a copy of credit report at a later time.

I have 37k outstanding. I would like to pay the money back in full over a longer time frame, called a few helplines and they have said that as the trust deed is unprotected I should be able to withdraw my application.... PLEASE CONFIRM IF THIS IS CORRECT??

The creditors which turned it down said it was because I used the ac****s a few weeks b4 signing trust deed. And even if I was to offer more money they would not accept a trust deed.

All I want to do, is come out of trust deed and replay my creditors monthly... over years but at least they will be paid in full.

I am waiting on a manager calling me back from my trust deed company.... I just feel so lost.

Kevin,

What is the longest time I can do a Debt Arrangement Scheme? 37k over 10 years??? Is that even a option?

How much was your agreed payment for the trust deed claire123?

£183, but now I have told family they have said they will help me monthly so can now afford more. Thought around £350??

Hi Claire123,

Try not to feel lost, as I've said you have a number of solutions available such as a Debt Arrangement Scheme or Sequestration.

Unfortunately a family member would not be able secure a big enough loan to clear £37,000. Lenders simply don't lend unsecured debts at that level.

The way to work our DAS out it to divide your debt by how much you can afford to pay per month. Your DAS payment needs to be sustainable. You would be asking your family member to help you pay £167 per month for 8.8 years. This is a long time for someone to make this commitment. Circumstances can change which could mean that later on down the line the family member isn't able to assist.

I know that you are ruling out Sequestration but to give you a comparison between that and a DAS:

A DAS you would repay £37,000 and it would be over approximately 9 years. On a DAS there is no guarantee that it will be accepted as like a Trust Deed, it's a proposal to creditors. If the creditors rejected the proposal then it is sent to the Accountant in Bankruptcy for review. They have the power to reject the objection if they believe the DAS is fair and reasonable.

Under a Sequestration you would pay £183 x 48 months and be debt free at the end. You would save yourself £28,216 but also approximately 6 years. That's a lot of money but more importantly it will allow you to move on quicker.

If you speak with a qualified Expert who regularly deals with Sequestrations they will be able to explain everything to you in a way which you can understand. It really is nothing to be intimated by. My firm currently handle over 100 Sequestrations per month on behalf of the Scottish Government.

I would arrange to speak with an Expert about your situation further. Kevin or I would be happy to do this with you. Once you do that and properly look at all of your options, the pros and cons you can then decide which option best suits your circumstances. Honestly I'm positive that after a short phone all with a qualified Expert you will feel much better about things

Hi claire123,

A DAS at £183 per month might not be viable - you'd be looking at nearly 17 years.

With family support and a payment of £350 it looks much more viable - though still a pretty long arrangement approaching nine years.

Can you rely on that family support for this period of time?

Is there any particular reason that means bankruptcy wouldn't work for you instead?

I'd tend to agree with the others, Claire123. Is it really a better option to ask a family member to help you out to the tune of around £170pm for the next 10 years or so?

Is there a particular aspect of bankruptcy that puts you off? In practical terms it is very much similar to a Trust Deed and really shouldn't be a painful process.