Hi Poochlover123 and welcome to the forum.

First off well done on taking a couple of very brave decisions and steps speaking with your husband and then looking for solutions to deal with the debts.

To answer your questions...

1. It’s nice and simple to work out a payment based on what you have described. The fairest way is to look at a household income and expenditure and then split the surplus based on who earns what % of the household income. For example if you have a surplus of £200 per months and you each earn 50% then your surplus is £100 and that’s the payment you would pay. The payment that you do pay should never be an amount that you can’t afford to pay.

2. As soon as you make your mind up that a Trust Deed is the option for you and have spoken with an expert you can cancel the payments and not have to worry about making these.

3. Yes open up a new bank account with either Nationwide, Barclays or the Co-Op as long as you don’t have debts with them. It’s up to you if you decide to pay your salary into your husbands account or not. It won’t make any difference to the Trust Deed.

4. A majority in number or 1/3 of your total debt need to object to it. If lenders don’t object they are deemed to have accepted it. Trust Deeds are regularly accepted by the creditors as we work to a set criteria. Once you speak with an expert such as Kevin or Sharon the two on the forum they can give you a good indication of your Trust Deed being accepted or not.

5. Others things to ask... if you have assets such as a house or car how will these be dealt with. Do you have any assets?

Ask them if they will be the company who will handle your Trust Deed from start to finish. Ask them how long it will take to receive your discharge at the end. Also ask if you will have the same advisor throughout the 4 years.

Try not to over think things or panic. I know that’s easy for me to say but for the majority of people a Trust Deed is set up, it’s acceoted, they make all their payments and are debt free at the end.

Hope this has helped put your mind at ease a little.

Welcome to the forum Poochlover123.

I'm sorry to hear that you're having such a tough week. Hopefully your conversation at home and the questions you're asking will be the start of making things much better.

Swandog has already offered you some great information and guidance.

As already stated, your husband's disposable income would remain his if you entered into a formal debt solution like a trust deed. It would be your disposable income that was paid over, after covering your share of the household bills and expenses.

The way that you manage your household bills is very common and will be something all experienced advisers will be familiar with. It shouldn't cause any issues.

You should only pay your unsecured credit commitments if you can afford to. That means that the household bills and reasonable expenses get paid first. If there's money left over it would be fair and reasonable to use that for debt repayment.

Once you commit to entering a particular debt solution you would usually stop paying your unsecured debts directly. Your surplus money would be paid into the debt solution instead.

Do you owe your own bank money? For example, do you have a credit card or loan with them as well as your overdraft? If you do, it will be essential that you open a bank account with a bank that you owe no money to. Best to go for one of their basic accounts without an overdraft facility.

The major lenders make known their criteria for accepting trust deeds. A good adviser will be able to tell you, in advance, whether your trust deed proposal meets that criteria. There's never a 100% guarantee that a trust deed will be accepted by creditors, but you'll be able to get good advance information as to whether there is any significant chance that objections might be raised.

Like Swandog, I'm wondering about any assets that you have. Do you own your home? Do you own a car? Are you likely to come into a lump sum any time soon? Please share any information about this with us as it will help us to offer you better guidance.

It might also be useful to know what type of work that you do. Most people can enter a trust deed without any impact on their employment, but there are a few exceptions.

Thank you for replying. Your information is helpful.

I do have an overdraft facility with the bank, and as they are reducing this quite drastically as of the 1st April I will have to arrange for my salary to be paid elsewhere as of that month, as I would just have my pay swallowed in to a big black hole otherwise.

We rent our house, I have a car in a PCP lease which is due to end in April, I have no idea what I will do for a car after that as I doubt I would be given another PCP lease as I suspect my credit rating will be horrendous, so that is another bridge I will have to cross. I need a car for work every day so am lying awake worrying about that on top of everything else. My husband owns his car outright but also needs his every day for his work.

We both work for the local council.

Neither of us have any other assets or savings (part of the problem). I am unlikely to come in to a lump sum any time soon, I wish, however my fathers widow (his second wife, not my mum) lives in a flat under a "life rent" agreement, should if snd when she dies (hopefully not any time soon) the flat passes to my and my brother, and niece (under a heritable property scenario as my sister - my nieces mum- sadly died a few years ago. So I'm guessing if that scenario transpired within the lifetime of a trust deed then my share of the property would be forfeited?

A couple of other questions if that's ok?

Through my local authority employment I obviously pay in to the local government pension scheme, plus I also pay a small additional amount (£50 per month) as AVCs. Would I need to stop paying into either of these?

Thanks for your help.

Hi Poochlover123,

If you have an overdraft you want to open up a new bank account ASAP and tell your employer your new details so your income is paid into the new account. You can normally open an account online with one of the banks I’ve suggested. Once you have the account number and sort code tell your employer. Ideally if you could do this for your February salary payment you know that in March/April no money will go into your old bank account and you won’t lose this to the overdraft.

Regarding a car, as this finishes in April could you start looking at cars now, sort out a car and the finance prior to proceeding with a Trust Deed and when your credit rating takes a hit. You could if done properly transition into a new PCP agreement as the old one ends and the Trust Deed is in the process of being set up. That way you have a car on PCP for the next 4 years.

If you are due to inherit an asset then this could be taken into the Trust Deed. This would need to be looked at a little further. If the agreement is that the property passes to your brother and niece and not you then it won’t have anything to do with your Trust Deed.

The extra £50 per month is that towards a pension? You are allowed to continue towards a pension as long as the payments are reasonable which I’m view it looks like they are. You would still be able to continue towards the pension should you choose to and can afford to.

How much do you think you could afford to pay per month if you didn’t need to pay all of the agreed debt payments and after you had ensured that all of your household and living costs have been paid?

Hi Poochlover123.

I am wondering about the flat that you mention.

Obviously your father's widow has the right to remain in the flat, but has it already passed into your ownership?

Ah I see your thinking TDA. Good question to ask.

Hi thanks again, I really value the prompt responses.

Re pension. I am a member of the local government pension scheme as part of my employment, that is a condition of employment. It's a standard local government pension scheme. The additional £50 is what's called an Additional Voluntary Contribution, it's outwith the local government pension, and is seen as an additional payment, it's managed by Prudential.

The flat has not transferred into ownership to anyone, it was part of my late fathers estate (well, the only thing in his estate really) and as such I don't know who actually OWNS it at the moment. His widow is allowed to stay in it, rent free, until her death. As far as I am aware, only then does it transfer into ownership of myself, my brother and my niece. I have never considered it as a current asset, and it is not available to be used as collateral for any borrowings, etc. I'm not hugely knowledgeable about the specifics, just that the terms of my dads will are it passes to us upon her death. She is in her 70s, so really, it's very much an unknown to me.

In respect of the car, I am just assuming that because my credit score will be so dire (maxed out credit cards, a few late - but not missed - payments) that I wouldn't be given PCP finance, but I admit, I've not actually tried. I've never missed or been late with a PCP payment and have a 100% positive history re payments for cars under varying finance agreements going back a number of years. The car thing is giving me as much, if not more, worry than the actual debt thing to be honest as I am so concerned about how I am going to do my job. I often need to travel for meetings out of town, etc, and need a reliable car. Do you think I should try for a new PCP deal? I know you can't give definitive answers but, am I likely to be accepted? So confused, and also so reluctant to be given any false hope so I hope you can understand ,e begin s bit puzzled.

I'm still in the process of working out all the outgoings etc with a view to seeing what I can afford to pay after outgoings and living costs, but I reckon it would be in excess of £500 a month. Ironically our day to day living costs are not excessive I reckon, but my debt is crippling.

I think I've missed the boat re the transfer of salary re my next pay but I am definitely going to arrange this for my salary at the end of March.

Sorry to ask so many questions.

Poochlover123

I know dealing with debt can be frightening and stressful however you have made the first step in seeking advice. You have raised a number of valid points that are very common when we speak to individuals looking for advice.

In calculating your income and expenditure there are a number of ways in which we can work out your disposable income. Every household is different and each party may contribute to different expenditure items. Rest assured, your husband income does not need to be used to settle your debt however there would be the expectation that he contributes to the running costs of the house – rent, council tax, food, gas, electricity and so on. From what you describe, this what is currently happens.

I would not recommend stopping paying minimum payments to your debts until you have spoken to an advisor and that you have been provided with the debt solutions available and relevant to your circumstances. After the discussion, you will be in a better position to make the decision to cease making payments. If you press the contact button either Kevin or I can discuss this with you today.

If you have debt with your bank, then I would recommend you open a bank account but stay away from Halifax or Bank of Scotland as they may freeze your bank account if you decide to enter into a trust deed – they have small print within their terms and conditions that allow them to do this. Also banks are promoting a switch facility which basically switches one account to another. I have found this has in itself caused problems. This is mainly due to the new bank paying the overdraft off and providing you with the overdraft with your new bank. It would be best to set up standing orders or direct debits manually when you open up a new bank account.

In terms of the trust deed process, creditors have the right to accept or reject the trust deed.

They can object for a variety of reasons and an experienced advisor will be able to provide further guidance once they know who your creditors are. Don’t worry – in the vast majority of cases, trust deeds are accepted. However, if creditors who represent a third in value or a majority in number do object then this would mean your trust deed is unable to proceed. For example, if you have 5 creditors totalling £30,000 then a third in value would be £10,000 and the majority in number would be 3.

Everyone has different questions in relating to the process. The best way I would recommend would be to note down any questions you have and ask an advisor. Don’t worry, everyone asks different questions and as swandog mentions, it’s important to outline any questions in relation to assets or any possible assets you are likely to acquire over the next 4 years. Also ask questions in relation to bonus, overtime, inheritance etc.

Can I ask something about your local authority employment – I am aware that councils are issuing back dated pay to staff members. Would you be affected by this?

Life rents can be rather complicated. To provide further information in relation to this, can you advise if ownership has been transferred already?

If it has then the way in which this is dealt with is that the property is valued and the life rented is deducted from the value (almost like a mortgage or security) and then split according to any co-ownership. Again, given the complexity of the matter, I wouldn’t want to provide further advice without knowing the full facts.

Thank you Sharon. We have not been given our backdated lay award yet, in my cast I reckon it will amount to around '£600 if backdated to April 2018, so not sure what impact that will have. The flat has not transferred into our ownership yet, it's still held/managed by the solicitor. To be clear, no income is obtained from the actual flat in the way of rent, my dads widow just gets to live there rent free until her death.

Hi Poochlover123,

Don’t feel bad or apologise for asking questions. Questions are good as from an advisors perspective they know you are thinking about everything and understand the process. Ask as many questions as you need to. No question is a silly question.

Your pension will be fine and you can continue to pay into this.

The flat would need further investigation by one of the experts just to see what the legal position of this is. Sharon has covered this.

I’d try applying for car finance right now to see if you can get it. That way you know if you will be successful or not. If you are rejected due to your credit rating then you will need to think of an alternative. This could be your husband taking out finance in his name but you paying this. You could also try and purchase a car for cash. Any car worth less than £3,000 in value isn’t regarded as an asset.

If you are successful in securing car finance make sure it’s Hire Purchase or a PCP or the finance is secured against the car. Sometimes the car garage will get you finance that is an unsecured loan. If that happens the loan needs to go into the Trust Deed.

£500 per month is a good amount to pay per month and at that level something that the lenders should accept. You want to ensure that this is affordable. No point trying to pay as much as you can and it’s a difficult 4 years on a Trust Deed. The experts will ensure that any payment you pay is affordable and sustainable per month for you.

You’ve came a long way since your post last night and hopefully things feel a bit more clearer with a possible way out of the debt with a plan. This time next week you could be taking steps to meet with an expert and enter into whichever plan is the most suitable.

Try to remain positive you will get through this!

Given the value of the back dated pay - I do not foresee this being a huge issue that cant be resolved.

Under a Trust Deed, there is a 4 year rule whereby if you acquire assets during that period then they are conveyed to your trustee and the trustee has a duty to realise them for the benefit of creditors.

The life rent issue is very complicated and would recommend a quick chat with either Kevin or I and we can look into this further for you.

As Swan dog says - try to remain positive

That's a really supportive post and offer np785641d to help Poochlover123.

I would definitely agree that it makes sense to try and get a new car deal now if it is a priority for you for your work. The car you currently have could just be handed back early even, and if there is a small shortfall to pay then it would be included alongside all of your other debts within your chosen solution.

The land register can be checked very easily to clear up the ownership situation for the property. It may be that it would only be an issue in the event of your father's widow passing away. I suppose though that in this eventuality even if you weren't entering a trust deed then you may end up using the value of your share of this house to clear your debts anyway? At least with a trust deed there must be a good chance that it will have completed and you would be free of the debts before this asset comes your way.

You have taken the hardest steps and everything else from here will at least be starting to stop the stress andheartache I know you'll have been carrying.

A couple of points to add to the fantastic help from others;

1)Please be absolutely sure to have everything in writing and in your hands at the outset of your trust deed if that's your eventual choice.
I was advised strongly on this and can only say that the lack of it has worsened a difficult process. We went for sequestration, not trust deed so I can't comment on practicalities with TD but make sure you understand how things are to progress and have it in writing

2)If your credit score/file prevents you from getting car credit in place, try Hippo car leasing/financing if your husband/father/ other family or friend are on board with trusting you to make the payments in their name. They refer to it as an 'accomodation.
As with everything,we felt that the costs were higher because of our financial history (seems crazy but it's a commercial decision)

My husband and I had everything in joint names and had to both be sequestrated so I had to ask my mum to be the purchaser,found that really difficult to ask her,embarrassed, guilty etc but like you had to have access to a car so humble pie was eaten.