Scottish Trust Deeds Help and Advice

Choo_Choo_4

Not at all Gillian, sure that's what we're here for - so nothing to be sorry about for starters!

It's a very strange scenario to be honest and I'm trying to fully understand what's going on with the car ??? I've never known a car to have EQUITY (unless of course you own it outright)

Do you own the car outright now then at this stage?
What kind of car is it and what is the approximate value?

It sounds to me like the Trustee has used you to make your OH's Trust Deed possible with this £170 contribution ...

At the end of the day though Gillian, you are not in a Trust Deed. The car is in YOUR name. The Trustee cannot take the car from you - it shouldn't form part of your husband's estate if his name is not on it.

I am curious to know what you "signed"? (like it wasn't a loan agreement or anything?)

Bankruptcy would have little difference to your husband - it would be up to him if he wanted to hold onto the house or let it go and relocate. BUT if you were planning to stay in the house then he would have to keep up the mortgage payments (and he would probably have to pay the Accountant in Bankrutpcy £500 - a one-off payment to cover the interest in property and therefore it would remain yours) - but you need to decide whether or not you want to remain in the house ... if you think you're living beyond your means in it then it might be worth considering letting it go?!

It is unlikely that he would have to make a contribution to the Accountant in Bankruptcy if his take home pay is £1120 as this is bound to be eaten up by household bills and everyday living expenses. He would be discharged from bankruptcy then a year later.

I am not saying that your OH Trustee is doing anything wrong or using bad practice so to speak as I'm only picking up on some things ... but she doesn't sound very helpful.

Tell me a bit more about this "car situation" - that seems to be the deciding factor on whether or not your OH should stop paying into the Trust Deed (unless Trustee can come up with practical solution) and consider bankruptcy ...

It doesn't sound like you're ready to throw the towel in on your marriage just yet ... I would say if you could resolve the financial problems the rest might just fall back into place - I certainly hope so ...

Que sera sera x

Choo_Choo_4

Right - now it's beginning to make a bit more sense ...

Hmmm ... it certainly is a tricky one, I'll give you that

I think it was a little unfair to ask for the £5500 up front for the value of the car albeit you might be paying it on a monthly basis BUT the usual way of it is that a valuation is carried out on the vehicle at the beginning of the Trust Deed and then again at the end and THEN the equity is addressed. So basically the car might have been worth £5500 at the beginning but it certainly won't be worth that in 3 years time.

So from this point of view I think it was unfair to ask for the FULL value of the car to be brought into the arrangement...

I know he's not long in it but can you confirm how many months have passed at this stage?

One option for you would be if you were in a position to pay off the equity in a lump sum - if the Trustee was willing to come to some kind of an arrangement - say if you owed £6120 over 36 months would she take £4k now for example? I know that you're saying she isn't very helpful but it's worth asking. (this might not even be an option for you anyways ...) It might be best to call and make an appointment with her as you can't really put all this in writing - your husband would probably feel better if he could sort something out face to face ...

His trustee is doing a job for him and has to speak to him - if she's not free at the time then she needs to take time out to help him out with this. The alternative is that he will fail the Trust Deed and go down the bankrutpcy route if she is unwilling to help ...

Let me think about this one Gillian and I'll come back to you if I can think of another way round this

Choo_Choo_4

Right Gillian ...

I think that due to the fact that something was signed by yourself to raise funds for the car at the beginning of the Trust Deed and this has since been sold to get a new car, albeit for the same value then the Trustee will probably say that you have benefitted from the sale of the car and could reclaim it in the event of the Trust Deed failing (or look for the oustanding payments to be made by you)

The Trustee has already suggested that she has no intentions of making your husband bankrupt but there are other ways that could lead to bankruptcy. But the Trustee will likely still look to recover the money pledged by you ... at this stage however you have not defaulted on this arrangement so I doubt that she'd be able to change the terms of it ...

Try to get speaking to the IP anyway, also put it in writing so you have something showing your efforts - either way changes need to be made.

beanielou

Sorry that things are so tough gillian

Choo_Choo_4

It really is coming at you from all directions Gillian.
Taking all things into consideration from the last few posts I would have to say that a Trust Deed does not seem to be the best option any longer for your husband. If your income has decreased to the extent that you've explained above then you certainly cannot afford it.

It is essential that you contact the IP anyway to discuss. Try to set up an appointment whether this is in person or over the telephone - the IP has an obligation to help you now and at least listen to what you have to say but if you don't tell them or give them that opportunity then there isn't really a lot they can do (although I do know that you don't have an awful lot of faith in her at the minute)

In order to address the money that you have agreed to pay in relation to the car - is there any possibility that you could sell your current vehicle to raise the funds to clear this? Would you be able to get a run around until you get on your feet again? If you can no longer afford the payments then this is the best you can do ... I know that you might not want to do this but it might be better to get rid of the dark cloud now instead of having it hangin over you for another few years (even if you did go bankrupt, you have to downgrade anyways if still valued approx £5k) ...

What about the mortgage? Can you afford to pay this each month or would giving the property up and moving into rented save much money?

SO many questions Gillian - sorry .. x

beanielou

You could get social housing or at least get on the list as you can show that you can no longer afford to pay the mortgage.
Get the forms

mcmahos

Hi there

After too many years of ignoring it, I've finally acknowledged that I'm in debt and in need of help.

I've met with a local debt advisor and we're working through options at present. I'd hoped that a DAS might be suitable but she has suggested considering a trust deed.

We've currently got approx £31000 credit debts (4 cards in my name only and a bank loan of £8k in joint names). The mortgage is about £55k and a secured loan of approx £56k (worst mistake I've made!). House is only worth around £100k at present so no equity left in it.

After doing a budget sheet the advisor reckoned we have around £160pm spare to pay creditors. For a DAS that would mean 17 years which wouldn't be accepted.

So my question is really, should we try and tighten our budgets to save £150+ pm (which will be tricky) in order to get a repayment scheme of around 10 years, or do we look at a trust deed. I'm unclear/unsure of the ramifications of it at present.

For example, would my car be at risk - 07 Scenic, worth approx £6500, with 1 years 0% finance left - it's just in my name. The only joint debts are the bank loan and secured loan/mortgage.

Any thoughts/advice would be much appreciated.

Regards

Stuart

Choo_Choo_4

mcmahos wrote: »

Hi there

For example, would my car be at risk - 07 Scenic, worth approx £6500, with 1 years 0% finance left - it's just in my name. The only joint debts are the bank loan and secured loan/mortgage.

Well Stuart ...

First and foremost you've taken the most important step in that you're trying to tackle the debt now - and that's good at least...

Now you just need to decide which option is best for you (or affordable)

I've taken the question you're asking about the car above - if you're saying that there is 1 years 0% Finance left on it - do you mean that this is another unsecured loan then? Have you included this in the £31k debts listed?

If this is not a Hire Purchase agreement then it's just a normal loan that you took out in order to pay for the car and this would need to be brought into any arrangement you might draw up to repay your debts whether it's DAS or Trust Deed. You cannot leave out debts because they've only got 1 year left or you want to keep one card open ...

Depending on which Insolvency Practitioner you go to they might treat the car differently but ideally a lot of Trustee's (in a Trust Deed anyway) would have the car valued at the beginning of the TD and then again after 3 years (at the end) - at that stage then if the car is worth more than £1000 it would need to be brought into the TD:

e.g. if car is valued @ £1200 after 3 years you would need to pay this either in a lump sum or by extended payments
if it is valued @ £800 then you wouldn't have to pay anything

This is all at the discretion of the IP so be sure to find this out before you sign anything - some IP's will ask for the value of the car to form part of the arrangement initially which is unfair because although a car might be worth £5k - it has to do you for 3 years and it will certainly not be worth as much at that stage ...

Also with regards to the Joint Debt - this would be included in any arrangement you might set up but if your partner does not plan on doing DAS etc then she will be liable for the remainder of the debt i.e. if you paid 20% in a Trust Deed the creditor would pursue her for the remaining 80% of the debt.

You cannot do Joint TD or DAS unfortunately.

mcmahos

Choo_Choo wrote: »

Well Stuart ...

First and foremost you've taken the most important step in that you're trying to tackle the debt now - and that's good at least...

Now you just need to decide which option is best for you (or affordable)

I've taken the question you're asking about the car above - if you're saying that there is 1 years 0% Finance left on it - do you mean that this is another unsecured loan then? Have you included this in the £31k debts listed?

If this is not a Hire Purchase agreement then it's just a normal loan that you took out in order to pay for the car and this would need to be brought into any arrangement you might draw up to repay your debts whether it's DAS or Trust Deed. You cannot leave out debts because they've only got 1 year left or you want to keep one card open ...

Depending on which Insolvency Practitioner you go to they might treat the car differently but ideally a lot of Trustee's (in a Trust Deed anyway) would have the car valued at the beginning of the TD and then again after 3 years (at the end) - at that stage then if the car is worth more than £1000 it would need to be brought into the TD:

e.g. if car is valued @ £1200 after 3 years you would need to pay this either in a lump sum or by extended payments
if it is valued @ £800 then you wouldn't have to pay anything

This is all at the discretion of the IP so be sure to find this out before you sign anything - some IP's will ask for the value of the car to form part of the arrangement initially which is unfair because although a car might be worth £5k - it has to do you for 3 years and it will certainly not be worth as much at that stage ...

Also with regards to the Joint Debt - this would be included in any arrangement you might set up but if your partner does not plan on doing DAS etc then she will be liable for the remainder of the debt i.e. if you paid 20% in a Trust Deed the creditor would pursue her for the remaining 80% of the debt.

You cannot do Joint TD or DAS unfortunately.

Sorry if I sound vague about this - I've never fully understood finance - probably part of my trouble!

The car agreement says Hire Purchase but it was a 4 year 0% deal through Renault which was paying off the balance after a part exchange and me putting money towards it. There is no final payment etc.

I've also just checked the bank loan and the statement's actually just in my name. So the only joint debt is the secured loans. Sorry for the mis-info before.

I know it's hard to give an answer, and the decision has to be mine, but I am really unsure as to whether a DAS or Trust Deed would be better. DAS means 10+years of repayments; TD means 3 years. I'm afraid that for the DAS over 10 years then things will change and we may not afford the payments, whereas a TD is obviously shorter, but possibly more 'painful'.

Stuart

laguna_1

quik questions guys

how new can a debt be for it to be put into a trust deed

i took some finance out to help wit payments for my dmp and also pay off some family i borrowed from

i shudnt have taken it and i was suprised i even mnaged to get it

however it's just made my total debt go up to 39k rom 37k

i was thinking a trust deed before however i know i need too go for one now

shud i leave this newish loan out of it as i only did it a month ago...and i think if i now go into a trust deed it'll look bad

im stupid for taking it out and i know i shudnt have, just pressure from people to pay them back (friends family) and making token payments also

help