Hi giving up and welcome.

It's hard to express an opinion on whether a trust deed is suitable for you (or the best option for you) without understanding all of the numbers involved and your personal attitudes to some aspects of how trust deeds work compared to other solutions.

However, from the numbers provided, it certainly seems as though it might be one of the viable options open to you.

The potential for there being equity in your home is a concern on a couple of levels. If there is equity you will have to pay it over as part of the trust deed. Remember though that the valuations used for trust deeds tend to result in a lower figure than might be obtained from a conventional valuation (prior to selling a home for example).

As things stand its pretty much impossible to release equity by way of remortgage while in a trust deed, so if there is equity you will need to have another way to deal with this in mind otherwise there will be a risk that the home needs to be sold eventually. If your half share of the equity is a fairly low figure this might be accomplished by making a few extra trust deed payments at the end of the usual term.

Don't be entirely put off by this; lots of homeowners successfully enter and complete trust deeds without any serious consequences for their home. It's just that you should tread carefully, have your position confirmed in writing and have a plan to deal with the equity before you sign anything.

Don't pay £500 to "protect the equity" either. There are trust deed firms providing the same service/process without a £500 fee (I do not know the practice of the firm you mention in this respect).

Where specialists are used very few trust deeds fail to become protected. The companies concerned know the acceptance criteria of all of the major creditors and should warn you in advance if there is a significant risk of rejection.

Hi giving up (don't!)

Any decent IP should be able to at least provide 95% assurance that it will go through ok.

I'd love to pretend its difficult to get Trust Deeds protected, honestly its not. The majority of creditors are dealt with by a company called the Insolvency Exchange who make decisions on behalf of RBS, BOS, most credit card companies etc etc. The interesting thing is that they give IP firms like myself a check list before we send them a Trust Deed and as long as we comply with their guide, they will accept it. So any decent firm should be able to tell you if it will become protected or not before it's even sent.

I hope I'm not giving the game away!! Honestly, the job is really hard!

Mark

Hi guys, thanks a lot for the replies.

Seen my potential trustee at RSM Tenon this morning, things went pretty well i think. The equity issue "may" not be a huge issue and a rough guide to monthly payments was worked out. (i could not confirm exact amounts owed this morning)

I have now confirmed the amounts and it comes out at £32K and not £29K that i thought!! £17K between 5 cards and a personal unsecured loan for £15K.

I am still unable to decide the best way forward, i am still terrified of losing my home and destroting my credit for at least 6 years!!

I have another potential option, i could get a low cost loan of 15K from my employers and pay off most of the cards, this would leave me with £1700 on a card which i could easily move around 0% ones until cleared as well as paying my personal loan off, this option means i could be debt free (if all goes to plan) in 3 1/2 years with no adverse credit history as i have no arrears and never have done with anything. My issue with that is, am i just borrowing more and delaying the inevitable??? It would only leave me with a couple of hundred pounds a month to live on once i pay back my monthly commitments.

Or do i bite the bullet and just throw my hands up and be potentially better off from next month by going down the trust deed route???? I am in a total quandry and don't have a clue what to do, the trust deed just seems to be sooo much better, but is it?????

Sorry for rambling on again. I will be deciding by Tuesday after a home survey has been done, if there is too much equity then i wont be going for it, cant risk it.

Any thought appreciated.

Thanks a lot

Hi giving up.

If you can refinance your debts in a way that's affordable then that would probably be a good starting point. A trust deed should be a last resort.

You've indicated that your disposable income might be in the order of £260. If you took this loan, would you be able to repay the new loan and all of the other remaining credit commitments (the ones that will not be paid off by the loan) for £260 per month or less?

If the answer is "no", you'd be likely to see your debts begin to build up again which would obviously be creating a future problem.

Do the company concerned think that the equity in your home will be a pretty low or non-existent amount?

Hi, thanks for replying.

I will stick it down in black and white, easier to explain. lol

The company thinks that the valuation may only leave zero or 1 or 2K equity for my share. Will be confirmed over the weekend.

My income is around £1900 per month, £700 of this goes on mortgage, utilities etc etc, £250 child maintenance. These are my MAIN outgoings.

At the moment i pay out between the cards and Personal loan,

Cards - £470 (minimum payments, 25% APR
Personal loan - £340 - 3 1/2 years to go.

Total - £810 (i will no doubt default over the coming months as i have used up my savings to top up)

If i was to get a loan from company

Personal loan - £340
Company loan - £300 over 3 1/2 years plus some of my bonus(5% apr)

I would then have a balance of around £1700 on one card to be put on a 0% deal and paid off pretty quickly by selling my m/cycle etc etc. Credit file stays nice.

Trust deed route

£260 per month and maybe around £1000 in equity release (TBC)
3 years, finished but suffering with credit file.

We are hoping to start a family in the next 2 years too so all of the above would have an impact too.

Hope the above makes sense!

Arrrrggghhhh, my head !!!!

Thanks again

Hi giving up

If it is workable without the Trust Deed, then this must be the option to investigate. I've always thought that the options should be DMP, DAS, Trust Deed, Bankruptcy. If the 1st doesnt work, look at the 2nd. If this doesnt work, look at the 3rd and so on.

Mark

To add to Mark's comments, the amount you can afford to pay into a trust deed pretty much is the amount you can afford to pay towards debts without having to borrow more.

Would you be happy to sign a trust deed with a £640 per month payment?

What happens when you factor in food, travel costs, clothing and everything else? Is a £640 per month credit burden manageable?

Hi there, if i had to pay £640 into the trust deed i would have a heart attack !!

When going through all the official figures today it came out at around £260 per month for the deed, £300 at most when i get back to them with the increased debt figures.

I am a wee bit confused!! sorry.

Sorry to confuse you.

I think what the numbers are saying is that you cannot afford your debts as they are, but if you took the company loan you'd remain in the same position. Consolidating only works when the new repayments are affordable. When factoring in all of your expenditure RSM Tenon think you can afford to pay £260 per month towards your debts, a figure much lower than your credit costs will be if you take the company loan.

That suggests going down the company loan route would not be an effective way to deal with your current situation.

Thank you very much, that makes sense now.

I am just trying anything i can to not go down the trust deed route but also dont want to just prolong things.

The gent i spoke to today is 99% certain that it would get protected, there is only 1 company I owe who usually objects but i owe then a lot less than a third and they only hold 2 debts out of my 6 if you know what i mean.

My main question is - If it gets protected, the equity is not too much and we pay it, is my ONLY risk/downside the fact that my credit is shot to pieces for a few years?

Can trust deeds be increased by loads if there is not a significant increase in my income?

Will starting a family be looked on badly in a year or two?

My wife is now panicking too in case she gets dragged into this, all debts is in my sole name.

Sorry for all the questions which i am sure you have answered a million time.

Cheers

Hi giving up

generally, it would appear that the credit rating is the main issue.

Any increase in contribution is based on a change in circumstances. I cant be adjusted unless theres a material change in circumstances and I dont see the family thing being an issue as long as you can maintain the payments.

The Trust Deed will deal only with yourself and should not have any impact on your wife.

its the unknown which is the killer, but once each point is clarified, its fairly straightforward.

Hope this helps

Mark

If you're reassured about your home and protection of the trust deed, and you cannot afford your debts as they stand, the question might be simply is there a better option for you than a trust deed?

The debt arrangement scheme is an alternative that will enable you to fully repay your debts. It would take ten years at £260 a month though.

A trust deed payment will be increased only if your circumstances change to make that affordable. I think you should ask what will happen if starting a family reduces your ability to keep up with the £260 per month commitment. It might result in an extension so that creditors still get the return they originally agreed to.

Hi guys, thanks agin. You give great advice and reassurance to people.

The payment of £260 will not be an issue, ever. Will make sure of that!

My wife has a good maternity plan through work that wil ease a bit of pressure on that side!

There are 3 things that stick in my throat,

1. My home being at risk

2. My credit file

3. My ability to pay my debts and letting lenders down. (i took on 15K worth of my ex wifes debt as i felt guilty, one of the reasons i am in this pickle!)

I guess i have some serious thinking to do.

Thanks again

Hi Giving up
I'm six months into my trust deed and all seems to be going as planned with no problems from creditors etc. If it works out as my IP says (and I've no reason to suppose it won't) It will be the end of years of worry about debts. I don't care too much about damage to my credit history as frankly I wouldn't be able to borrow more anyway. You're right to look carefully at the issue of equity in your property and you should speak to at least two or three insolvency companies and then take your time to make a decision. I suggest the issue of equity should be settled at the start with your IP. If the amount is modest it will be possible to extend your monthly payments to cover it. If you're thinking seriously about a trust deed you should open a bank account with a company you've no debt with soon. I'm also not too comfortable about letting lenders down but on the other hand they've lent money at a low rate and then jacked the interest up. They also stopped offering 0% or low rate transfers so I was stuck with it. Most of what I owe is really interest anyway. I think they have to accept some responsibility for problems many people are having. I guess some degree of default is factored into their business plans. Good luck.
Snowball