Hi Kaz.

It may be helpful if you could let us know who this creditor is in case any of our experts have some specific experience of working with them.

The creditor is Tesco it was for an unsecured loan.

Whilst a protected trust deed does not automatically "cut down" a pre-existing earnings arrestment, in many cases an arresting creditor will agree to lift the arrestment in order that a trust deed can proceed. So I wouldn't rule out a trust deed as an option just yet.

There are other options too which do force an arrestment to be stopped -namely sequestration and DAS. So your family member could look for advice on these options too. If they would prefer a trust deed then I can't see why it couldn't be tried, but if the arresting creditor refuses to lift the arrestment then they could revert to one of the other options instead.

Thanks Kevin
I will pass this advice on, i think Trust deed would be the ideal option but my relative has contacted Tesco and they were not very cooperative. Wonder how they would react if told that they were forcing my relative into Bankrupcy then they would get nothing back on the loan? Can you recommend a company for my relative to contact? Thank you again.

Hi Kaz.

There are plenty of good trust deed firms around.
We think that four of better firms are represented on this site by Kevin, Shona, Chris and Mark. There are others as well.

Is your family member a homeowner?

Yes they are a home owner and have a company car

Do you think that they'll have equity in their home Kaz?

I dont think they have any equity in property. House prices where they live have taken a big fall due to the current climate prob siting in negative equity.

Why can a DAS lift a wages arrestment order yet a trust deed cannot?

Paul

Hi Paul

It's one of the areas up for review in Trust Deeds, to cut down wage arrestments. I think its because the DAS legislation is newer to incorporate this, but Trust Deed legislation hasn't quite got round to it.

Mark

Thanks Mark,I thought it may be something like that. Any other areas of tds that are being looked at?

Paul

Hi Paul.

Pretty much everything about trust deeds is "on the table" at the moment.

The AIB have started a consultation looking at questions like:

1: Should there be no access to a trust deed if you could fully repay your debts using DAS within 8 years.

2: Should a trust deed last for five years as standard rather than three,

3: Should a trust deed run as long as it takes for creditors to get at least a 50%
dividend.

Things, it seems, will certainly be changing.

TDA,

The review looks like changes may be "in the post".
Question 3 looks particularly significant. Do you or the rest of
the experts know what %, if any currently exceed the 50% dividend?

Surely that would be unrealistic!

Ralph

I don't have the exact figures to hand, but from my experience I would say not many pay 50% of the debt. The government have been trying to make trust deeds more difficult for years now, so we have to response to the consultation paper, and see where it goes from there. One thing is sure....there will be change.