Welcome to the forum Steff90.

I think you would need to speak with your prospective trustee about how much savings you will be able to have when your trust deed begins.

Trust deeds take assets into account - significant savings would be seen as an asset. You might have to hand the money over to help repay your creditors.

You should be given a modest allowance for contingencies during your trust deed. This will potentially allow you to put some money aside during the arrangement itself.

Regarding holding off for 90 days, that's your decision of course. You may potentially face a significant amount of creditor hassle (up to and including legal action) during that period.

Thank you for your response!

I have been on another forum and a lot of people have suggested starting an emergency fund before starting any repayment plan.
However I am unsure if this just applies to someone going ahead with a DMP/DAS. And many have said to stop paying any creditors and allow my accounts to default[xx(] Obviously my credit rating is going to be affected regardless due to the Trust Deed.
But I don't want to do anything and it will cause any further issues.
Just need some advice, it's a lot to take in!!

I'm not saying that the trustee will not allow you to have any money set aside Steff90. I think the thing to do is to ask them how much they would consider reasonable - you can then plan from there.

It is different with an informal debt management plan or DAS - assets aren't taken into account.

Other than the savings aspect, I can see no potential benefit to you of allowing the accounts to default before going ahead.

Thanks again [:)]

I have also been recommended to go into a DAS.
Sorry to be a pain, but what are the main differences with these?

Also, I know with a Trust Deed, it stays on your credit file for 6 years from the date it was signed or thereabouts.
With a DAS, is this the same timescale? Or is it 6 years AFTER the DAS ends?
Again, I appreciate any advice.

Hi Steff90.

Could you please tell us:

1 - How much you owe (I think £19,000 from your footer comment)

2 - How much you have been told you can/will pay each month

3 - Whether you own your home (or any other major asset)

4 - What type of work you do

This will help you compare how each of these options might work for you.

My surplus income would be around £346.99. to put towards debt.
I do owe around £19k - this is not an exact figure however it is roundabout this.
I do not own my own home - I rent privately.
I work in Customer Service for an engineering company.

The entry for a DAS or a trust deed would stay on your credit file for six years from the start.

Creditors also report to the credit reference agencies. In a longer DAS there would be a longer period of potentially negative credit reporting.

It doesn't look like DAS for you would be very long. In a fee-free DAS you're apparently looking at 4 years and 7 months to clear the full debt that you owe. This is based upon the figures provided and assumes that nothing will change.

A trust deed has a minimum 4 year term, so the time periods aren't very different. When you have completed your obligations, any unpaid debt will be written off with a trust deed.

DAS is considered to be a less serious type of debt solution. It isn't insolvency. Your creditors get paid (almost) in full. It will likely be less damaging to your credit status.

You can read much more information about how exactly trust deeds work at:

https://www.trust-deed.co.uk/scottish-protected.html

Hi Steff90,

You are doing the right thing looking for further advice and information regarding your options.

Is the payment of £346.99 affordable for you? It’s a large payment per month so you want to ensure that a thorough income and expenditure has been completed with a qualified advisor. A good advisor should ensure that nothing has been missed when it comes to your budget. Common things that are forgotten but add up are haircuts, school meals or meals at work, Christmas and birthdays and also just family days out etc. You need to be confident they with your budget you can still cover things like this.

You should be allowed a reasonable amount for savings and within your budget allowances should be made for things that could come up such as car MOTs if you have a car. The legislation is your allowed to save a maximum of 10% of your disposable income per month capped at £20.

Sometimes it’s a good idea to sit down with an advisor and look at your budget in person as on the phone it can be tricky to remember everything. You could reach out for a second opinion to discuss things in person if you think that will help.

Swandog thanks for your reply.
I have went through a pretty deep income/expenditure sheet with a Payplan advisor. She is calling me back Thursday to see what I want to do/thinking of doing. I'm just not sure it's a scary thought! My surplus was after everything including haircuts etc. However in the meantime I'll go through and make sure I've included everything.

Ok that sounds good.

I wouldn’t delay entering into a plan to save too big a balance for emergencies. The quicker you enter into the right plan the quicker you come out of the other side debt free. Plus it will allow you to start 2019 on the right foot.

Do you have debt with your bank? If you do you will need to change your bank account.

What about a car, do you have one on finance or paid off?

I have just taken a new account out and transferred all my direct debits over. I do have a car it's on PCP finance unfortunately I only entered it in may this year and it's a 4 year PCP. Any advice/warnings with my car? I believe only a trust deed would affect my car if it was over £3k...

Ok that’s good about the new account. You want to avoid BOS/Halifax as they can freeze and close your account when they find out about a TD.

Any car free of finance and valued more than £3,000 is regarded as an asset. As your finance is PCP and for the duration of a possible TD there shouldn’t be any issues. You just need to think about 4 years time when you need to look at another car as your credit rating won’t be good.

Have you provided bank statements and payslips to Payplan to for them to review or are you still at the initial stages?

Also, have things like changes in circumstances or possible inheritances been discussed regarding Trust Deeds?

To be honest I'm probably swaying more towards a DAS than a trust deed. I haven't been off the internet all night looking into it! Pros and cons of both obviously. Nothing been discussed in full yet as she only emailed me with the possible solutions. She is calling me on Thursday and we'll discuss further. Looking for another car with a trashed credit rating worries me #128556;

The good news about your car Steff90 is that you don't own it. It's not an asset for this reason.

The consideration instead (for now) will be whether the finance provider is happy for you to continue the agreement if you enter into a formal debt solution. Most will, provided you keep up the payments, but there are a couple of exceptions. This may be another thing to discuss with the adviser.