Hi VWPolo

I think the extent of the debt is possibly too large for an informal arrangement and as legal action is being threatened, you may need to look at a formal process.

In DAS you would require to pay the full debt, so this may not be a realistic option. A Trust Deed would allow for a reasonable payment and debt write off, although I suppose it depends what you are able to afford on a monthly basis by way of contribution.

The threat of court action can take several months, although can be quicker. You should be aware that a Trust Deed may not cut down a wage arrestment etc if it gets to that stage, although will cut down incomplete legal action.

i hope this helps

Mark

Mark

Hello VWPolo,

If there are legal threats being made taking prompt action is probably the best thing to do.

How much do you feel you could afford to pay towards the debts each month (after you've paid for essentials like mortgage, council tax, utilities, transport, food, clothing etc)?

Hi

The answer is not much. We have two ten month olds and only one income into the house at the moment. This should change when my wife returns to work in December.

Probably around ?ú200-?ú300 per month maximum. I have done a spreadsheet of our household finances and it makes worrying reading, essentially we are out more than we take in on my salary.

Do you think this is realistic?

Our letter from MBNA says that we need to make contact within 7 days to arrange some kind of repayment plan or they may "recommend that our solicitors commence legal action".

Thanks!

VWPolo

Hi VWPolo,

Will the amount change significantly when your wife returns to work or will childcare costs eat into the earnings?

If the amount will not increase by much I think it's important that you speak with a Trust Deed professional as there appears to be no chance of being able to repay the debts in the "normal" way. They'll be able to tell you whether a Trust Deed is viable and sensible for you, and whether there are other better options you might consider, once they fully understand your situation.

Choosing a Trust Deed company carefully is important as you will want to have clarity about how certain aspects of the arrangement will work (especially if/how your house would be involved in the arrangement). As you'll find elsewhere on this forum there seems to be some variance between different Trust Deed firms in how potential assets like this are dealt with.

Hi

The amount includes my wife going back to work.

Can you recommend a firm that I should phone? I am trying to avoid bankruptcy as it could impact on my job.

VWPolo

Hello,

We feature the firms of Mark McFadyen (who contributed to this post earlier) and Kevin Mapstone. Each is contactable via their profile pages on the left hand menu of this site and there is more information about them personally and the firms they work for.

The reason they and their firms are featured is that we are confident in the quality of service and advice that they provide.

Both have received great feedback from previous visitors to the site who have gone on to enter into Trust Deeds.

Hi VWPolo

could you advise me if the debts are in your name, your wides name or joint. If joint, could you let me know how much for each. This will give me a better understanding of the options & figures.

Many thanks

Mark

Mark

Thanks for your reply.

The debts listed are in my name. My wife has debts of a personal loan to A&L (?ú220 per month) and a Co-op Bank Credit Card (?ú36 per month).

We would prefer to avoid including her in any options.

VWPolo

Hi VWPolo,

When you suggested that ?ú200 to ?ú300 per month was affordable did that include provision for your wife to continue to make the full payments on her debts?

A Trust Deed is an individual agreement so there is nothing to say that both of you must take the same (or any for that matter) action.

TDA

Yes, we are trying to make sure that we can at least meet her obligations.

VWPolo

That's an area you'll need to work through with the firm that you choose to make sure it will work for all parties (you, your wife, and your creditors).

The normal calculation for a Trust Deed contribution would be to go through your family income and expenditure to find out what your total disposable income is.

This total can potentially then be divided between the two of you. For example (and this is a little simplistic but hopefully useful for an illustration) if you both brought home ?ú1500 per month earnings, and jointly had disposable income of ?ú500, it could be concluded that half of that total (?ú250) belongs to each of you.

In this example your Trust Deed monthly contribution amount might be ?ú250 and your wife might be left with ?ú250 to use as she wishes (including servicing her own debt).

As I say this is a slightly simplistic way of explaining this and the Trust Deed firm you choose will need to work through the numbers with you to make sure everything is done in a way that is fair on both of you and your creditors.

TDA

Thanks for all your help. I have worked through another spreadsheet, this time a joint one. Our total surplus is around ?ú150! Our income has dropped substantially and the child care costs for two ten month olds are horrific.

What should we do now?

Should we phone the companies and try and stall them for a bit?

VWPolo

Hi VW Polo

Could you advise me of the balances for the 2 loans in your wifes name.

On the basis of the information, ?ú150 would not be sufficient to proceed with a Trust Deed for debts in the region of ?ú72,000 as stated at the commencement of the post, so I need to look at the bigger picture to see if there are other avenues.

Mark

Mark

For my wife: Credit Card ?ú1,800, Personal Loan: ?ú8,000

If we cut out costs such as holidays etc., I could probably afford ?ú400 per month. Is this a more realistic figure?

VWPolo