They couldn't demand full payment as if you entered a trust deed they would become a creditor (unless they objected). Don't worry.

Hi Jabbathehut and welcome to the forum,

This sounds like a standard clause in a finance agreement.

If you are suitable for a Trust Deed and decided to proceed with one then this isn't something which you need to worry about.

Can you give us a little more information about your circumstances and we can advise you of your options. Ideally can you tell us what your total debt is, if you have any assets such as a house or car and how much you feel you could pay per month to a plan.

The positive thing to remember is that you will have a solution to help you deal with your debts.

Hi David Tannock owe 3,000 overdraft, 5,700 credit card 1, 1,700 credit card 2, 2,800 catalogue, 18,100 personal loan, 800 kitchen loan. Owner/occupier currently paying mortgage of 93,000 which is secured to first plus and work full time. Could pay 150-200 per month. House next door sold for 99,000 in May 2015.

It looks like you'll have a few options here Jabbathehut, though I must stress that you must speak directly with an adviser to review everything in more detail before making any decisions.

Sequestration may be a possibility, though caution might be required in terms of potential equity in your home. You'd be discharged from your unsecured debts after a year, but you'd have to pay what it's deemed you can reasonably afford for a period of four years.

A trust deed may also work for you. Once again, the issue with equity will need to be looked at closely. It's possible to have the valuation done before you're committed so you can make an educated decision in that respect. Trust deeds last a minimum of 4 years usually, during which you'd be expected to pay over what you can reasonably afford.

The debt arrangement scheme (DAS) may also come into play as an option, though from the figures provided this looks like it might be a very long arrangement as debt write-off doesn't occur. Repaying £32,000 at £200 per month would take more than 13 years. Assets aren't included however, unlike with trust deeds and sequestration.

Would your employment be affected by any of these options? For most people this isn't an issue, but there are certain professions in which this is more of a factor when making a decision.

Hi, thanks for the reply the house has no equity as its secured to first plus for a secured loan of £55,000. We are still paying mortgage with about £79,000 still owed. My work would not like this so I would have to enter possibly trust deed privately.

Hi again Jabbathehut.

Employers aren't contacted as part of the process of setting up these debt solutions, so there's no need to worry about that side of things.

There are however public registers of each of these options. People aren't going to stumble into the information, but if someone chose to go looking it's there.

If it were an absolute "no no" an informal debt solution like a debt management plan (which has no public register) might be suitable - but the term would be at least as long as DAS and you wouldn't have the same protections.

Is there any reference to debt or insolvency in your contract of employment?

What line of work are you in, Jabba?

In order to become "protected" (ie legally binding on all of your creditors) a formal notice has to be placed on the register of Insolvencies. Whilst this is available for anyone to see if they search the Register, in reality I don't believe may employers would do so, and there is no need for the employer to be notified. In any case it is very rarely a problem these days with the vast majority of employers.

I wouldn't foresee any issue regarding your home given the figures you have mentioned - it should be able to be ignored due to the negative equity. All in all, a Trust Deed does sound like it could be a good option for you as long as the employment issue is not a problem.

Hi I work in public sector and nothing on my contract stating no debts etc but wouldn't want employer to know

I worked in tbe property search industry during my trust deed and nobody found out, and we search the insolvency registers everyday!

I wouldnt worry about it.

That's very important that there's nothing in your contract of employment Jabbathehut. Is there any kind of employee handbook that is also relevant to your employment?

As mentioned by others here, for most people these types of debt solution have no effect on employment.

I'm guessing that your contractual monthly repayments must be quite a lot more than the £150-£200 that you believe would be affordable for you? How are you managing to get by from month to month at the moment? Are you in arrears on these debts? Are you in arrears on any priorities such as your mortgage, council tax, or utility bills?

Whilst there is no guarantee, chances are that your employer would never become aware of the Trust Deed, JabbatheHut. They certainly wouldn't be notified as a matter of course.

Looking at the figures you have given us, I wonder whether you really have any choice but to consider insolvency options - to try and pay the debt off at a rate that you can afford would take a very long time. Maybe the small chance of your employer finding out is a risk worth taking on order to put a workable solution in place and enable you to get free from the burden of these debts?

Hi Jabbathehut,

The only time someone's employer is notified of the trust Deed is if the client fails to co-operate and maintain payments towards the Trust Deed. Other than that, there is no reason for an employer to find out about it.

Employers attitude towards people entering Trust Deed's has changed a lot over the years. I have people from all types of jobs who have signed a Trust Deed with me such as police officers, paramedics, teachers, college lecturers, civil servants etc.

In 12 years and in thousands of cases I've only had one person whereby their job has been affected. They were an account manager for a large stockbroker. This was a number of years ago, going back to 2007 or 2008 if I remember right. I think employers nowadays need to show a supportive side to them if someone is in financial difficulty.

If you have checked your contract and there is nothing in this that mentions Trust Deed's or Insolvency then you should be fine.

I'm sure you will have lots of questions that you are unsure of and that's why sitting down with a qualified advisor and discussing these will help to put your mind at ease. Entering into a Trust Deed can seem like a big step but actually when you think about it, it's an offer from you to your creditors that you will pay a payment for 48 months and at the end, they agree to release you from the balance and write this off. As long as you are able to complete all of the payments then you will be debt free at the end.