Hi Downonluck94 and welcome to the forum.

First off well done on taking the brave decision to reach out for help and advice.

When it comes to dealing with your debts whoever you use for this there shouldn’t be any unanswered questions. You should come off of the phone feeling a lot better and knowing exactly how things will work. It doesn’t quite sound like this has happened.

How much are you going to be paying per month to the Trust Deed?

When speaking to them about your debts and options, did they discuss a Debt Arrangement Scheme with you?

As long as your car is on hire purchase or pcp agreement then there shouldn’t be any issues and you should be able to keep the car. I should point out that within all finance agreements there is a clause about entering into a Trust Deed or any reduced payment plan with your lenders can give the finance company the right to take the vehicle back. This very rarely happens but again it’s one of the things a good experienced expert advisor should cover with you. Did they check if it was on this type of finance?

You won’t have to return the Littlewoods items.

Once the Trust Deed starts you won’t be able to use the credit cards that are included and going forward you should try and avoid where possible using credit or else there is a risk you could build up more debts. Any debt taken out after the Trust Deed starts can’t be included.

As long as you don’t have an overdraft balance at the point you sign the Trust Deed and you don’t have debt with your bank then they account should be fine. Only exception to that is Bank of Scotland / Halifax who don’t like to have customers who have entered into a Trust Deed banking with them.

If you take your time and do a little research and ask loads of questions you will be fine and proceed with the right plan that suits your circumstances. Also no harm in seeking a second opinion on your options.

quote:

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Originally posted by David Tannock
[br]Hi Downonluck94 and welcome to the forum.

First off well done on taking the brave decision to reach out for help and advice.

When it comes to dealing with your debts whoever you use for this there shouldn’t be any unanswered questions. You should come off of the phone feeling a lot better and knowing exactly how things will work. It doesn’t quite sound like this has happened.

How much are you going to be paying per month to the Trust Deed?

When speaking to them about your debts and options, did they discuss a Debt Arrangement Scheme with you?

As long as your car is on hire purchase or pcp agreement then there shouldn’t be any issues and you should be able to keep the car. I should point out that within all finance agreements there is a clause about entering into a Trust Deed or any reduced payment plan with your lenders can give the finance company the right to take the vehicle back. This very rarely happens but again it’s one of the things a good experienced expert advisor should cover with you. Did they check if it was on this type of finance?

You won’t have to return the Littlewoods items.

Once the Trust Deed starts you won’t be able to use the credit cards that are included and going forward you should try and avoid where possible using credit or else there is a risk you could build up more debts. Any debt taken out after the Trust Deed starts can’t be included.

As long as you don’t have an overdraft balance at the point you sign the Trust Deed and you don’t have debt with your bank then they account should be fine. Only exception to that is Bank of Scotland / Halifax who don’t like to have customers who have entered into a Trust Deed banking with them.

If you take your time and do a little research and ask loads of questions you will be fine and proceed with the right plan that suits your circumstances. Also no harm in seeking a second opinion on your options.

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Thanks for your quick response, I mean today I’ve been a bit of an emotional wreck, whilst on the phone I did have my 2 kids running riot around the house so maybe I was told but I wasn’t retaining the information. I’ll speak to him tomorrow again and maybe run over whether or not a trust deed is the right choice for me, to lose the credit rating and all the credit I’ve gained sounds pretty scary right now but on the other hand this is what’s got me in this mess...

He made my monthly repayments abundantly clear and on reflection this is so much more affordable for me, but the thought of losing my ‘semi’ good credit score and whatever credit I’ve built up is hard to take.

How much did they work out you would need to pay per month to the Trust Deed?

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Originally posted by David Tannock
[br]How much did they work out you would need to pay per month to the Trust Deed?

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Around £97 pm

Thanks for that.

Try not to worry too much about your credit rating or also access to credit for the short to medium term. Your main focus should be making sure you have enough money to live on and look after your 2 kids. Only after doing that then think about paying your debts.

if you did enter into a Trust Deed, Debt Arrangement Scheme or even a Sequestration (Bankruptcy) it’s not the rest of your life that your credit rating will be impacted but 4-6 years from now.

Did you go through a thorough budget to ensure that all your expenditure has been covered? I know you might have been paying out £300-£400+ per month on the debts and now reducing that to £97 sounds great but you need to look at a budget.

If your debts are £6,000 then you could enter into a Debt Arrangement Scheme whereby you pay back all the debts and doing this over 4 years would be a payment of £125 a month.

To add something extra into the mix you could also consider Sequestration and depending on your finances and household income and expenditure you might qualify for the minimal asset process Bankruptcy. This is where you pay a one off fee of £90 and all your debt is written off and you are debt free after 6 months.

A good advisor shouldn’t just explain a Trust Deed but all of the options to you. When you speak with the advisor again make sure to ask these questions.

Thank you for your advice I WILL look into this, with my brief description of my debt and situation in your own personal/professional opinion what do you think is the best action for me to take?

My month income is around £1500 pm, my out going bills inc rent and stuff AND the existing repayments to my debt is around £1200. My partner works but paid only in cash in hand so that is not a guaranteed form of income but it rarely goes below £100pm. We also receive Child TC (£39 p/w) child benefit (£130 pm) and my wife receives carers allowance (£66 p/w).

When it’s written down like that I wonder how we struggle so much, as a couple we do budget well and stick by it, but with interest rates that are ridiculous this makes it hard to live within our means but also repay debt.

Welcome to the forum Downonluck94.

How much of that £1200 per month goes on debt repayments?

Debt advisers start by looking at your household bills and reasonable other expenses (excluding debt repayment). Your bills and other expenses are the priority to make sure you and your family are OK. What’s left over after that (if anything) helps an adviser to guide you to a suitable solution.

One way or another, there will be a way to make things better and get a new start. Sadly however, any kind of formal ‘debt solution’ will impact upon your creditworthiness. That’s not forever though.

Hi Downonluck94
It worries me that you say the adviser you spoke to never took your car payments into account when working out your repayments. Are you sure about that? How are you going to keep paying a HP agreement if you haven't been left sufficient funds in your budget to do so? Or was the car just on a personal loan and no longer has to be paid?

I share David's concerns that you have come off the phone still with so many questions running around your head and am also concerned that a Protected Trust Deed may not necessarily be the most appropriate route for you. I'd recommend getting a second opinion from a debt adviser before signing anything.