Hello Hellsbells80,

If you decided that a Trust Deed was the solution for you, any equity that you release would also go to your creditors. If you are in a position where you can borrow money, as well as obtain equity from the sale of your home, and this sum of money pays off your entire debt, I'd suggest taking this route.

A Trust Deed worked well for me, but I didn't have any equity nor did I have an option of borrowing money. It is not a last resort but it does normally last at least 36 months, if not longer and is a major commitment.

I'm sure the experts will be along to offer advice shortly.

All the best.

Hellsbells80,

Please note you must be careful as not to preference one creditor over the other. Any transfer or sale of assets prior to entering in to a Trust Deed may be challengeable by the Trustee if not done so properly.

You are better allowing the Trustee deal with assets and paying creditors. They act for the best interest I the creditors and also have a duty of care to yourself.

If you are committed to doing. TD it may be better to allow everything to be dealt with through it. Any costs involved in selling the property shall be borne by the estate.

I think it was said before on another thread that the money could be taken back from your family but not sure how that happens, if its over time etc

Again, not sure but seem to remember it applies to money from the last 5 Years b4 your trust deed started.

Would the money from selling the house leave anything over if you paid what's due to family ?

There would be a number of options available to you depending on full circumstances which I do not know at this time:

Attempt to sell house, use equity to pay family and try to manage remaining debt.

Sell the house, pay family then enter in to a DAS which does not deal with assets. This would require monthly payments from income until the remaking debt is paid off.

Sign a Trust deed which would raise equity via a number of different options (sale, 3rd party funding etc) to allow this to be dealt with quickly. Monthly contributions would also required to be paid over a number of months generally 36. Entire debt is then written off at the end of the arrangement. Only downside from your family's perspective is that they are treated as an unsecured creditor and will fall in line with other creditors to receive a proportion of their debt at the end of it.

Thanks for your replies, I am just so frustrated by the whole thing but can see my choices are limited and I think Rob's suggestion on paying the money to my family and entering a DAS could be my only realistic option. The fact that my family can be hounded for the money is terrible as the person in question is a pensioner and I would never let that happen. The house if it sold and after paying the money back would leave about 2K RBSB. Still I have a little time to do think this through need a level head on and not a hot one as I am at the moment. Thanks again.

I would not rush in to anything. It's a buyers market at the moment and if you anticipate only receiving £2k equity after costs of the sale it does not seem much given you will lose your home. You may wish to hold off selling until the market pickets up as this will provide more equity given the mortgage redemption will be less and you may obtain a higher offer.

You have to decide what your priority is and determine what option best fits that requirement. House, family, other debt, duration

If I am reading this write, the £2k would be left AFTER the family debt is repaid from the proceeds of the house sale. Is this right?

Whilst I am sure many will agree with your comments about bankers, hellsbells, I'm afraid that a trustee has a legal obligation to act in their best interests regardless.

Hellsbells80, have I understood properly.? You would plan to sell, pay family then have only £2000 left?
Would you live in. The property while selling or move elsewhere?
What size of debts do you have overall? A
DAS after paying family may be an option if the total can be repaid by up to 120 repayments and no-one hounding your relative.
I would be cautious on expectations from A sale currently as you might not achieve what you've been led to expect.

Hi hellsbells80.

Have you spoken to your relative about this?

Would they perhaps be prepared to help you by waiting for the money to be paid once you have resolved your difficulties with the other debts?

You can find more information about trust deeds and debt owed to family at:

https://www.trust-deed.co.uk/family-debts-and-money-owed-to-friends.html

Hello, I think this situation has took over my life. Yes after paying my family back there would be £2000 left to pay to the CREDITORS. I can understand what the experts are saying that the interests of the creditors come first. My own morals however are telling me its not!! which is neither here or there I know. I dont have the option of waiting much longer Rob as the house will be took back within the next month or so. We are living elsewhere as we had to move to secure employment the other side of the country and renting out a property, due to a bad run of events detailed in my last posts with bad tenants not paying the rent and damaging the property it has been up for sale for nearly 6 months and we can no longer find the money to pay both our way here and keep upto date with the house, we have close to £2000 in arrears on the mortgage. My husband took out his TD in November due to running out of options to pay his debts. Sad realy after 23 years serving in the Armed Forces to lose all our money in a house due to GREEDY bankers and now the same cretins are hounding us for the little blood we have left to give. Not right one bit.

Hello TDA, I spoke to my husband about this option last night as its his Dad that gave the money to us to repair some of the damage to the house. We told him he would get it back as soon as the house sold as we know he isnt in the position not to get it back. This makes it so hard to now go back to him and ask this of him.

I can understand this would be really difficult. He's obviously a generous and kind man though, and might really want to help if he knew how much it was needed.

It's obviously a very personal thing though so I can understand why you might not want to.

hellsbells80,

What are you basing the likely sale price on?
Will that pay outstanding mortgage + arrears plus sale costs and your Dad-in Law then have £2000 left?

I would worry that there is very little margin for costs rising or sale price being lower within that.

I can't help but think that a properly managed rental would allow you to put a plan in place for the arrears, most lenders will listen to proposals for arrears if regular payments can be restarted.

It depends a lot on what was already agreed though for the payment of equity into the pot for creditors.

I know it can be really hard to swallow but we effectively did a deal with the (goal-post moving) devil. I had one creditor we'd paid £8000 per yr for minimum payments over 2 yrs, no reduction in the debt as the rate had been increased to over 29%, I found it hard to feel bad that the balance due was not going to be repaid in full.

However, I am able to add up all the accounts and generally feel the relief of drawing a line under them, whatever I can pay, I will and still be thankful. I am fortunate in not owing family a lump sum but I have had to have a commitment from them to shore us up during the next 3 years in bankruptcy.

Hello RBSB, yes taking it the house sells for its lowest value which is £20000 under the valuation the mortgage would be paid in full and would be able to pay money owed to family and be left with the £2000. My husbands TD would recieve £3500 towards creditors, more than enough at that. Yes indeed agree with you and the Devil can not go without his pound of flesh!! Once again thanks everyone for your time on this and all your advice. Off to make my own deal with said Devil!!