Hi ScottAnne

I am surprised ( or perhaps not!) that CCCS suggested a DMP.

It would appear that your total assets exceed your total debts and therefore DAS would be the obvious answer. This will at least guarantee the interest is frozen and you can deal with this over a set period of time.

Are the debts joint and what do you think the total contribution could be?

Hope this helps

Mark

Hello ScottAnne and welcome to the trust deed forum.

The position of this site in terms of debt management plans is pretty clear. We think that a resident of Scotland would almost always be safer and more certain if they used the debt arrangement scheme (DAS) instead.

A debt management plan will not guarantee the freezing of interest. The debt arrangement scheme will.

A debt management plan does not prevent legal action by creditors (perhaps directed at your home for example) whereas a debt arrangement scheme that is up and running will do.

More about this at:

http://www.trust-deed.co.uk/debtarrangementscheme.php

The debt arrangement scheme doesn't take your home (as an asset) into account, but a trust deed will.

You appear to have £38000 of equity in your home based on the figures you have provided. How comfortable are you that the true value of your home, if you needed to sell it fairly quickly, would be £200000?

If there is £38000 of equity you'd have to pay that over in addition to monthly trust deed contributions to help repay your creditors. As equity releasing remortgages for people in trust deeds are more or less a thing of the past, there would be a great risk that your home would have to be sold to release this cash.

Besides, if there is £38000 of equity you could just sell your home yourselves, repay your debts in full, and avoid Scottish trust deeds altogether.

Is the business account overdraft on a sole trader basis or for a limited company?

How does the £32000 of debt split up between the two of you?

Thank you Mark for your response and yes it definitely helps.

Yes I had read about DAS after being pointed to the CCCS website.

Our Debts are a mixture of Joint and Sole.

Contribution amount would be £400 per month.

Any thoughts?

Trust Deed Assistant thank you for your reply.

To answer your questions.

Our house was valued at 200k but has also been on the market for 2 years at a reduced price of 195k and has not sold. That valuation was 2 years ago, Im not sure if it would still stand. It was to be the solution to our problems but I really do not think it will sell so time to consider other options.

With regards to the debts. The business overdraft is my husbands, he was a sole trader, has since taken paid employment so no longer self employed. It's value is £5k

The rest of the debts are broken down as follows:
Joint Bank Loan: Nationwide 13,867 - never defaulted
RBS Business Ac O/D: Husbands 5000 - just under this amount
Barclaycard Visa: Mine 4900 - never defaulted
Bank of Ireland Visa: Mine 4500 - Missed a few by a few days but up to date
Tesco Cr Card: Mine 900 - Up to Date
Nationwide cr Card: Mine 300 - Up to Date
NAtionwide O/D Joint: 300 - not contributing really
RBS Business Cr Card: Husbands 280 - up to date
RBS Visa Card: Husbands 1200 - Up to date
Next Store Card: Mine 300 - Up to Date
Hire Purchase: Husbands 680 - Up to Date

Thanks
Anne

Hi ScottAnne.

If selling the home for an amount that would clear your debts is proving to be difficult, and you would prefer to stay in your home anyway, the debt arrangement scheme seems like a good potential option.

A fee free debt arrangement scheme, at £400 per month on debts of £32000, would take 6 years 8 months.

That's at least 3 years 4 months shorter than the estimated term provided by CCCS for their DMP (which suggests they anticipate some interest would continue to be charged). You'd also have certainty with DAS about no further interest or risk of legal action.

Frankly, the CCCS advice that you're suited to a debt management plan seems really odd. It may be available to you, but I'm struggling to see why it would be in your best interests on the basis of the information on this thread.

Hi Trust Deed Assistant.

Yes I would definitely prefer to remain in my home.

Could the proposed best solution from CCCS in the form of a DMP as apposed to a DAS be because I was reserved in my esitmates for Child Tax Creits when completing the questionnaire.

I am due to return to work next week following maternity leave and after phoning the Tax Credits office for a figure towards the cost of my childcare I was advised of £180 a week which I cannot see how this could be right. So therefore when completing my statement of affairs on the CCCS Site I halved this amount to be on the safe side which left a surplus of £206 a month to use towards creditors as apposed to the £400 I have advised you.

Thanks
Anne

If the surplus were £206 the repayment terms involved certainly change, but I think the logic of the debt arrangement scheme being safer and more certain remains.

On £32000 of debt, with a monthly contribution of £206, a free-to-client debt management plan might last about 13 years (assuming that interest is frozen, which it might not be).
On the same terms the debt arrangement scheme would last about 13 years if your monthly payments remained the same.

There has been some discussion on the forum before as to whether DAS can run for a term over 10 years. My understanding is that the DAS is often set up for expected terms that are longer than 10 years so long as they appear to be viable (for example, you're not going to hit retirement age after 5 years and suffer a massive drop in income that means payments cannot continue).

Hi ScottAnne,

I would agree with TDA that there is likeliehood that the DAS will be accepted at a length of 10 years if it was deemed to be a viable payment programme.

Chris

When I last saw figures from the AIB there were loads of debt arrangement schemes set up for terms longer than ten years. 18% of them in fact:

More here:

http://www.trust-deed.co.uk/news/whousesthedebtarrangementscheme.php