Welcome to the trust deed forum Confused.com9547.

Could you tell us a few things that will help us to advise you please?

1 - How much do you pay to your debt management plan at the moment?

2 - How much does each of you owe? When you work this out please count the joint debts in full for each of you - e.g. a £5000 joint loan would be a £5000 debt for each of you (I know this sounds a bit odd).

3 - Are you property owners? If so, is there equity in your home?

4 - Do you both work?

We pay £307 per month- £50 fee to the Debt Management plan. We have currently been in this for 2 yrs. They have advised that it will be 4 yrs till we debt free. We own our property, there is negitive equitiy in the house as this is what the Trust Deed company advised. My husband and I both work full time. Our Debts:

Me: about 13.5k including the 7k joint loan-
Husband: about 11k also including the joint loan of 7k

Thanks for that.

Is the £50 fee included in the £307 or on top of it?

Sorry to be answering your question with questions!

Included in the £307.

Thanks again Confused.com9547.

I'm uncertain about the advice you've had that your debt management plan has four years to run.

I'm getting your total debts to be around £17500 (£6500 for you plus £3500 for your husband and the £7500 joint loan).
£257 appears to be going to your creditors each month, so if interest and charges have stopped it seems like the remaining term could be just over 5.5 years.
There are no guarantees that interest will be stopped using a DMP (or remain stopped if it already is) so the term could be longer.

One alternative might be the Debt Arrangement Scheme. This is a formal type of debt management plan where you would be certain that interest was not being charged and also legally protected from creditors (which you aren't by a debt management plan).

Using a fee-free DAS the remaining term for repaying the debts in full would reduce to 4 years and 9 months.

We've written quite a few times (around the site) that almost everyone in Scotland who is currently in a debt management plan would be more certain of their position and legally safer by moving over to the debt arrangement scheme. More info on DAS at:

http://www.trust-deed.co.uk/debtarrangementscheme.php

Trust deeds may well also be a possibility for one or both of you. This would reduce the repayment term to three years normally (though there are circumstances where you might be asked to agree to a longer arrangement).

You'd be out of debt sooner it would appear using a trust deed, but it is a formal insolvency which many people would prefer to avoid if they can repay their debts in full over a term they consider to be reasonable.

Another option might be bankruptcy (sequestration). This process would likely work in a similar way to a trust deed in that you'd each be expected to pay what you can afford for three years. Like a trust deed, this is a serious option upon which you'd want to take direct professional advice first and think about carefully before committing.

A final thought. You'd mentioned that a trust deed firm contacted you. Are they known to you? Are they connected to your debt management provider? I ask because cold-calling has been at the root of far too many problems that have come up in this forum over the years.

Thanks very much for your advice, The company said they got my number from another company when I signed up for something. They weren't from the Debt Management company.

Can I ask another question, what effects your credit rating more the Debt management plan or a Trust Deed. I am aware both will affect our credit rating and it will be on our credit file for 6 years.

Hi again.

You don't really know where you stand with a debt management plan and your credit file. A DMP itself isn't marked, but any Default Notices, late payments, payment agreements etc all probably are. Every time something like this is marked it will stay there for six years and these events may continue during your debt management plan.

A trust deed is a much more serious thing to have on your credit file. It will stay there for six years from the start of the trust deed and should no longer be apparent after that.

It's one for you to weigh up really. The DMP is likely to have a less severe but longer-term effect. A trust deed is likely to be more severe initially but disappear from your record sooner.

Hi confused

I have to agree with the posts above. The sensible option would be something formal, either DAS or Trust Deed or even sequestration. At least you would be guaranteed the interst is frozen and this would allow you a specific time period to deal with things. Also DMP will not protect you from legal action.

Mark

Thank you both for your advice it is much appreciated and valued, it has given us a better perspective.

hi confused

I would also agree with TDA and Mark. All the other options give you more protection and certainty than a DMP. If you decide you would like to go down the route of a Trust Deed or Sequestration, please do not just take someones word on the value of your home. Most of the firms on the forum get valuations done before signing anything, so that you are 100% sure of the equity situation. Don't leave it to chance!