Welcome to the forum crazychick.

The advice to trust deed firms is not to put forward a case unless the creditors will get at least 10 pence back for each pound owed. Cases can be (and are) accepted at this level.

Your creditors will assess the fairness of your proposal in a few ways:

1: is your trustee's fee reasonable?
2: is your monthly payment reasonable based upon your circumstances?
3: would another option offer them a better return on what is owed.

Have you signed the actual trust deed document yet? You could ask for confirmation that your offer meets the acceptance criteria of each of your creditors.

thank you.

the advisor did say that 10p from every pound would go towards my debt. He did say the chances of them turning town the offer was slim considering my amount of debt and the companies involved but just wanted to get a second opinion to be sure as he stated if they refused the offer it could lead to me becoming backrupt which i do not want.

i have never been in this position before so was unsure of the correct practices.

do all companies charge these fees to process a trust deed?

thanks

Hi crazychick.

All companies charge fees to set up and manage Scottish trust deeds. The fees can vary a lot though. In some circumstances high fees may lead to trust deeds lasting longer than three years or to creditor objections.

How much do you owe in total?

How much is it proposed you will pay each month?

How long is the proposed trust deed to last?

i currently owe £8500 and they have proposed i pay either £150 per month for 48 months or £180 per month for 36 months. I have opted for the 36months which is what he is putting forward to the companies.

Hi crazychick.

Was the debt arrangement scheme mentioned to you? A free DAS would clear your debts in full in less than four years at £180 per month. This might be a lot kinder on you in the future as you'd have avoided entering personal insolvency.

At £180 per month for 36 months in a trust deed you'd pay £6480 in total. A 10% dividend means that £850 of that would go to your creditors. £5630 would go in trust deed fees and costs.

i did ask him about that and he said both plans have positives and negatives but didnt realy elaborate on it. would it be possible to cancel this trust deed considering a signed paperwork today? nothing is set up as yet, he was just gathering my id and documents in order to start the process.

would a DAS be more beneficial to me?

So long as you have not signed the trust deed itself its entirely up to you whether you go ahead with it or not.

I'm surprised more information wasn't offered to allow you to make an informed choice between these two options.

Which would be best?

If you want to clear your debts as quickly as possible a trust deed may be better. It's personal insolvency however, which should generally be a last resort.

The debt arrangement scheme looks like it will take a little longer. It's not personal insolvency and the vast majority of your debts will be paid off. This may be kinder on your credit status in the future, and some people would prefer to repay their debts if they can do so in a reasonable way.

the only thing he realy said about the DAS was when i asked what would happen if i lost my job. He said with a Trust Deed, if you couldnt make the payments due to ill health or loosing your job the trust deed would continue to run and at the end all debts would still be cleared. With DAS he stated if you could not make the payments the arrangement would be cancelled and you would owe the full amount to all of your debts.

Hi crazychick.

DAS might end if you could not make the payments. With a free DAS the payments you had made would have helped to clear your debts for as long as you had paid them.

We hear different things about trust deeds. Some firms will strive not to penalise an individual who could not make payments for reasons which were out of their control. Other firms might discharge their client but without discharging them from their debts.

Do you have a specific fear about your own employment?

im just realy trying to cover all bases. these days redundances are happening all the time so wanted to clarify my position if this happened.

im begining to think DAS may be better for my future credit rating.

my partner currently has a DAS but i assumed the trust deed was better, i didnt realise most of the money went to fees and not your debt.

The adviser either didn't know much about DAS, or was only interested in selling you a trust deed, IMO.

If you are in DAS, and your disposable income drops by 50% due to ill health or unemployment/change in employment, you can apply for a six month payment break. You can also apply to reduce the amount you pay each month if your circumstances change. The DAS Administrator will decide.

If you didn't get the payment break, or change to payments, and ended up having your DAS revoked, you would owe whatever was left of your debts once all your payments to the DAS had been deducted - plus the interest and charges which had been frozen during the DAS.

If the trustee in a trust deed discharged you from the trust deed without discharging you from your debts, then you would owe the full amount that went into the TD in the first place - all your payments will have gone towards paying the trustee's fees. Presumably you will also owe the interest on those debts.

The bottom line, though, in my view is "Are you insolvent?". If you are not insolvent, then an insolvency solution seems inappropriate.

I just had a quick look at the website you named.

The company behind it is listed on the das website as an approved DAS money adviser organisation - so the salesperson who visited you could probably still have got some commission by selling you DAS rather than a trust deed.

As for him not knowing about DAS, neither does the website. It hasn't caught up with the new legislation in some areas, and is glaringly incorrect in others.

I think it's always wise to get a second opinion. In your circumstances, given the 'advice' you have received from this person, I think that it's vital for you to get a second opinion.

many thanks for all your advice TDA & candlewick. the information you have supplied has helped me come to a decision that a Trust Deed is not for me.

i have emailed the adviser who visited me this morning advising i have seeked further advice and would prefer to go through the DAS route.

do you know the best way to go about arranging a DAS?

Hi crazychick.

This page has a little more information about the options:

https://www.trust-deed.co.uk/debt-arrangement-scheme.html

There are plenty of companies that can help you set up a debt arrangement scheme. As they charge fees from your contribution each month this route will take longer than the free DAS option.

You could also approach the money advisers that may work at your local CAB or Local Authority who can set up a DAS for you without any fees being charged that can delay the full repayment of your debts.

According to the feedback we receive some people can access free services quite promptly, but in other areas there may be a bit of a waiting list. It's probably worth looking into how quickly you can get an appointment on a free basis locally and then weighing it against how urgently you wish to make progress.