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Trust deed or DAS not sure

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(@layercake)
Active Member
Joined: 3 weeks ago
Posts: 3
Topic starter  

Hi all

Not sure if TD protected or Das route

£16k of unsecured debt, and 15k in partners. Concern is the family home, might be worth 110k balance on mortgage is £47k which has been renewed and fixed with same lender as i was unable to move lenders due to credit score being low. 

I am not sure if trustee will force sale or release of some equity and to what percentage LTV,? Ideally i would like to avoid this or even the worry of it.. As i will be unable to get another mortgage 

If anyone can advise that would be appreciated. Also any recommendations on who best to contact in regards to this 

 

Thanks 

 


   
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Kevin Mapstone
(@kevin-mapstone)
Member Admin
Joined: 15 years ago
Posts: 4246
 

Good morning Layercake and welcome to the forum.

As the equity amount is a fair bit higher than the amount of debt it might not be straightforward to get a Trust Deed set up, though creditors may accept a proposal where only part of the equity is being gathered in, perhaps by way of payments from a third party such as family/friends or by an extension of the term of the Trust Deed by a year or two.  Remortgaging is rarely available to people in PTDs so wouldn't usually be part of the conversation.

Uncertainty shouldn't be a factor at least, as any agreement regarding equity has to be set out in writing as part of the proposals and is binding on all sides, so the Trustee cannot just change the goalposts afterwards and your home would be safe as long as you fully comply and pay what is agreed by creditors at the outset.

DAS is generally a better fit for those with significant equity in their home because there is no need for it to be taken into consideration.  As long as a monthly payment is affordable that will repay the debts within a reasonable time period then there is every chance that it could be successfully set up.  It could also potentially be set up as a joint DAS payment programme, with your partner's debt included in it too, which may help.

Other forum members may have recommendations for you on who to speak to about this.  Additionally, the firms represented on this forum all deal with DAS and Protected Trust Deeds, including my own, so if you wish to reach out via the "contact" button then we would be happy to have a closer look at your situation and help you with whatever you wish to do.

Scottish Debt Solutions Expert - Ask me for help setting up a Scottish Trust Deed or Debt Arrangement Scheme plan.


   
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(@layercake)
Active Member
Joined: 3 weeks ago
Posts: 3
Topic starter  

@kevin-mapstone

 

Thanks Kevin, wouldn't the equity be 65% ltv,? Obviously you can't release 100%,

I will be intouch once i have worked everything out and see exactly where i am at. 

 


   
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Kevin Mapstone
(@kevin-mapstone)
Member Admin
Joined: 15 years ago
Posts: 4246
 

It is very rare that we would set up a Trust Deed where a remortgage is part of the proposal, as it is very unlikely to be possible even at 65% ltv.  Have you tried remortgaging recently, as a formal debt solution might not be necessary if that was an option?

Scottish Debt Solutions Expert - Ask me for help setting up a Scottish Trust Deed or Debt Arrangement Scheme plan.


   
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(@paulp)
Reputable Member
Joined: 7 months ago
Posts: 6
 

@layercake, in my experience creditors would focus more on the value of the asset owned, than the potential of a debtor to borrow against that asset.


   
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 CIF
(@cif)
Reputable Member
Joined: 11 years ago
Posts: 217
 

Hi Layercake, I just wanted to weigh in with a bit of support for Kevin here.

My own situation was far from straightforward in relation to my property situation but he managed to get an arrangement set up that I just didn't think was going to be possible.  Both him and Annmarie have been terrific from the outset and all the way through my now fourth year of the Trust Deed. I had sadly been over the course before about 15 years ago with a different firm and the difference has been night and day.

Anyway, best of luck and I hope things get sorted for you.


   
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 nm89
(@nm89)
Active Member
Joined: 9 months ago
Posts: 13
 

@layercake Hi Layercake. If I've interpreted your first post correctly, you have £16k debt, and your partner has £15k?

Your share of equity is £31.5k, which is almost double your debt.

Important to note, you cannot do a joint Trust Deed, or include your partner's liability for his/her debts in your Trust Deed. They would need to repay their own debt, or enter their own debt solution. You CAN do a joint DAS.

It is theoretically possible for a Trust Deed to be proposed where equity exceeds debt, and only a portion of the equity is to be realised, however this is completely at creditor discretion and would typically require a strong justification. One justification may be that your home meets the criteria of a family home, per s113 of the Act. This would likely reduce the amount of equity available in a forced sale scenario, so creditors may be willing to accept a lower equity amount.

Remortgaging is a concept in the English solution (IVA). I'm not sure if you came across that in your own research, or if you've been speaking to a debt advisor about a potential Trust Deed. If you've been speaking to an advisor and they mentioned remortgaging in a Trust Deed, I'd recommend seeking a more professional advisor!


   
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(@gracelynn)
New Member
Joined: 4 days ago
Posts: 2
 

good work to clarification


   
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