The main thing to look at here , as far as I understand things, will be if you have any substantial equity in your home.
If you do, then if you choose a TD, you will be expected to realise that equity at then end of your TD. And that may be a difficult thing to do at that point as your do credit rating will be shot.

Contact one, or more, of the advisors on this board and get a face to face meeting before deciding anything.

Thanks JintyMcSkinty,
We are in a private let so no equity. I only wish we had, would be happy to use anything to clear this. Have emailed privately too so hopefully reply soon. Was just looking for some input from others, sometimes you can see the woods for the trees when your in the thick of it!
Drew

Hi Drew

Can you let me know what the debt split is. ie how much is in your name, how much in your wife's name and how much in joint names.

This gives a better indication when putting together a proposal. The difference from what you say will probably just be the repayment period. Looking at the higher amount (£250) then DAS would be 7 years minimum, although this would be extended if the contribution was less for a period, as you mention.

Sequestration may also be an option. Do you have any other assets like car etc?

Mark

Hi Mark,

Debt split is as follows,
£6649.87 joint loan
£4883.17 is mine split over 2 credit cards, a store card and an overdraft.
Approx £9k is husbands split between credit cards and HMRC.

Will a DAS do less damage to credit rating than a trust deed? Part of me would like the trust deed as it would be over with sooner but concerned about affect on future?

Drew

Mark,

Do not want to go down sequestration route and yes we have a car but we do not own it. My father in law does and it is currently used so my husband can work.

Drew

Hi Drew

Your credit rating will be affected whatever option you look at unfortunately.

Everyone always has a strange frightening ideas about sequestration, however it's nothing like people think. It's a non court process like trust deeds.

In trust deeds we work to a criteria set down by creditors and as long as we meet their criteria, they will accept. It not quite the will they/won't they scenario that people think.

You will see from the forum that the best advice is always to see what best suits your circumstances and nothing else. Once you look at all options, it easier to see what best suits and your then comfortable knowing that you have a definite start & end date which is key to everything.

Mark

Sorry Drew I meant to say that even at £250 per month it would be quite tight as a trust deed. Also the car would not be an issue.

Typing too fast for my own good! Even with one finger!

Mark

Hi Mark,

I appreciate that, want the best solution. Would credit rating recover quicker/better from DAS? If trust deed is not protected can we pull out without further repercussions?

Drew

Hi Drew

In all options you are not paying the full debt plus interest, so credit rating will normally fall to the 6 years for all.

If the trust deed does not gain protected status then you can look at the other options. As mentioned though, no decent firm would make a trust deed proposal unless it fitted with the criteria & was 99.9% sure of gaining protection.

Mark

Hi Drew,

I'm not an expert on credit ratings but my theory behind this when it comes to a DAS is that your credit rating will probably be affected for a longer period. In a TD or Sequestration creditors generally place a default notice against you around the time you enter the plan and this stays on for a 6 year period then drops off.

With a DAS because creditors are receiving a monthly payment for the duration they may not put a default notice against you and therefore the credit rating will continue to show as poor for the duration of the DAS and possibly longer once the DAS has been completed. Effectively if the DAS was a 7-8 year plan then your credit rating could be affeted for a minimum of this and possibly longer.

Like I said I'm no expert on credit rating and someone may correct me on this. I don't think the DAS scheme hasn't been around long enough to really gauge the impact on credit ratings.

Yes, Drew as Mark said a definite start and end date is key - that's what I thought too and I did have a definite end date but the Company I signed with 'sold' my case on 4 months before the end of my TD process - now I don't know when my end date will be as the goalposts have all changed!!! Be careful who you sign with.

Thank you Mark and David,

Your knowledge has been very helpful, now another conversation with the other half go see what to do now.

Thanks also Mary, that is a worry as we thought we had finally sorted things originally with our DMP, so would hate to be so close to the end and be told again we're not!! Our little girl is 6 months old so the hope is to be debt free by time she goes to school! Here's hoping!!

Drew

I think the key point is that credit ratings can eventually recover following any debt solution.

The key focus should be what is the most appropriate way to move forwards from being stuck financially to getting a fresh start.

Certainly personal insolvency (trust deed or bankruptcy) is a more serious credit "event" than going into DAS. However DAS, depending upon circumstances, could have a lingering influence over your credit file for longer.

In either instance however, once the debts have gone, the need for credit will typically be much lower as a big chunk of income will no longer be going out towards the debts, one way or another, month after month. Most people will find they have a reasonable amount of spare cash for the first time in a long time.

I appreciate this logic doesn't transfer so well to big-ticket credit needs like mortgages or car purchases.

Hi Drew,

If you both signed Trust Deeds which failed to become protected then there is nothing to stop you applying for a DAS instead.

However, as Mark said, it is very unusual for a Trust Deed to fail to achieve protected status as good advisers will know beforehand whether there is likely to be any problem and suggest alternatives if it is likely to fail.

Are you confident that you can manage £150pm whilst on maternity leave? It doesn't seem a great deal less than the £250pm when you are back in work.

In terms of credit files, I think it is often better to take a short-term hit and then start the recovery process sooner, rather than a long-term arrangement that will keep your credit rating poor for longer.