Scottish Trust Deeds Help and Advice

Miss_Poohs

My husband has a DAS (Debt Arrnagement Scheme) which is 13yrs long - so the 10yr rule doesn't always apply.

Co-incidence or what, but his biggest debt is also to Northern Rock.

coolcait

Hiya again lostboy

I'll start with your last line, as I think it's easiest to answer. I don't think that CCCS will give preference to the creditors that fund them. All of your creditors would be treated equally.

I may end up doing a couple of posts in reply to yours, as there are a number of issues involved, so bear with me. Please also remember that these are just my personal views, and it would do absolutely no harm to cross reference them with one of the free advice agencies!

Let's take your wife's situation first. New Tomorrow have advised her to go straight to bankruptcy, but have they actually told her how she can do that? There are two ways to make yourself bankrupt in Scotland. The first is LILA (Low Income Low Asset), which won't be an option for your wife since she owns property.

The other way is to show that you are apparently insolvent. The two 'classic' ways of doing this are to show that you have a Charge for Payment or Statutory Demand which has expired (ie, the time you were given to pay off the debt has run out. It's 14 days for a Charge for Payment and - I think - 21 days for a Statutory Demand. Don't quote me on that as my computer is running really slowly, and I can't open another window to doublecheck like I usually do!).

From what you've said, your wife doesn't have that kind of proof of apparent insolvency.

Here's where it gets interesting. Another way to show that you're 'apparently insolvent' is if you sign a Trust Deed, and it doesn't get protected. (That's part of the reason why New Tomorrow should have warned you that signing a trust deed could lead to bankruptcy - I take it that they did? Along with the other things like the possibility of losing your home etc?).

New Tomorrow might be correct in saying that NR would not agree to your wife's trust deed becoming protected. But, if their advice is that she should go bankrupt, that is exactly what she needs to allow her to do so - she signs the trust deed, it doesn't become protected, she can show 'apparent insolvency', she can go bankrupt. Of course, there might not be any money in that for New Tomorrow...

If the trust deed DOES become protected, then that's what you were hoping for anyway, so it seems like a win win situation to me.

You WILL still have to find a way to pay her share of the equity in the properties even if the trust deed does become protected, within the three year period of the trust deed.

If your wife goes bankrupt, she will also have to find her share of the equity in the properties. Not necessarily within 12 months. She will be discharged after 12 months, but if she has to pay a contribution to the bankruptcy she will pay that for three years. Similarly with realising equity. The trustee will not be discharged until that has been sorted out. A DECISION on the equity should be made in the first 12 months, but you won't necessarily have to pay up that quickly.

If your wife does opt to go bankrupt, and is able to do so, I would very strongly recommend that she does not choose to nominate New Tomorrow (or any other Insolvency Practitioner) as her trustee. Let the Accountant in Bankruptcy be the trustee, IMO. There's a good chance that the fees will be lower than if it goes to a private IP (even if it's sent to an agent to deal with). You might also have a better chance of paying less for the equity. The AiB seem to be more open to coming to an agreement on the equity, as long as it's a reasonable offer. In a trust deed, the trustee will probably insist on the full share of the equity.

Whew! Hope that hasn't worn you out reading it! And I'm going to be writing even more...

LostBoy

Thanks Coolcait. - I undestand what you mean re: a win win situation for my wiife. however, it's not really our preferred choice.
We are never going to get another mortgage in our lifetime so I think it has to be a priority to try and hold onto our home. So, we have to hope, I think, to come to a debt repayment program with our creditors.
Entering our trust deed or bankrupcy would inevitably mean losing our home because no-one will give us refinancing to raise the equity in our property within the 1-3 year period.
looking forward to your next installment.:T

coolcait

Still me...

If you're self-employed, you might be better off with a trust deed than with bankruptcy, as the TD would allow you to keep your business going. That said, depending on exactly what you do (people use 'self employed' to cover many different things), you might also be able to go bankrupt. The AiB's frequently asked questions on bankruptcy acknowledges that, if you are self employed, your tools of the trade would be considered exempt assets. So it might be worth digging into that a bit further with one of the free advice agencies (or even try the AiB helpline 0845 762 6171).

You've talked about a Debt Management Plan. Has anyone mentioned the Debt Arrangement Scheme to you? If New Tomorrow have been seriously discussing trust deeds with you, then - by law - they should also have gone through all of your other options, including DAS. If they didn't, then tsk, tsk, tsk :rolleyes:

It's generally accepted that payment programmes under DAS should last for less than 10 years. However, the actual legislation doesn't put a limit on them. And, if all creditors accept it (or don't reply to the offer), then the law says it must be approved. Word on the street is that some DAS advisers stick rigidly to 'ten years max', others will try anything:cool: .

Anyone who is in a DAS programme is protected from legal action by their creditors. Their creditors HAVE to freeze interest and charges during the programme, and write them off if the programme is completed. And, if they try to harass you, they can be told that they are breaking the law by trying to get you to pay more money than agreed.

It might be worth looking into. You would have to find a DAS adviser in your area (you can find one on here www.moneyscotland.gov.uk), and it won't happen overnight. Realistically, you're probably looking at 6-8 weeks. Which isn't far off what you're looking at for your CCCS appointment.

However, you are looking at a similar timescale for any protection from your trust deed to kick in. Once you've signed it, your trustee has to advertise it in the Edinburgh Gazette, which is only published twice a week, and you have to factor in the time it takes them to get the notice out (you probably won't be their only case, sadly, given the financial state at the moment). Once it's advertised, creditors have 5 weeks to register their consent or objection, or not reply - and be counted as having consented. Then your trustee has to send all of the paperwork to the AiB and - assuming it's all correct - the AiB has to record it on the Register of Insolvencies. It's only at that point that it becomes 'protected' and your creditors can no longer take action against you. All in all, that timescale isn't a kick in the shirt off 8 weeks - in a best case scenario.

If you are really worried about one of your creditors taking diligence against you (various forms of legal action to make you pay), you can get a brief period of protection by telling the AiB/DAS Administrator that you're thinking about going onto the Debt Arrangement Scheme. This is not a legally binding contract, so you wouldn't be obliged to go down the DAS route if it wasn't right for you. However, it gives you the time to check DAS out (since it doesn't happen overnight) and decide if it's right for you. The protection lasts for six weeks from the date the DAS Administrator puts it on the DAS Register, and you can only do this once in any twelve month period. If you want to do this (the posh term is 'put in an intimation') then there is a form you can use. I'll post it in another post (:o ) since I can't open another window right now.

I hope that there's something useful in all of this. Good luck with whatever you go for!

coolcait

Me again

Here's the link to the form for making an 'intimation':

http://www.moneyscotland.gov.uk/das/files/Notice%20of%20Intimation%20of%20an%20intention%20to%20apply%20for%20approval%20of%20a%20debt%20payment%20programme.pdf

And here's where you can find a DAs adviser in your local area:

http://www.moneyscotland.gov.uk/das/das_display.jsp?pContentID=247&p_applic=CCC&p_service=Content.show&

There's also a DAS helpline, if you want more info about DAS itself:
0845 612 6425. They won't be able to set a programme up for you (I've found out), or give you advice on what's best for you, but they can tell you how it all works.

I hope that you've got something out of all of this waffle!

coolcait

Miss_Poohs wrote: »

My husband has a DAS (Debt Arrnagement Scheme) which is 13yrs long - so the 10yr rule doesn't always apply.

Co-incidence or what, but his biggest debt is also to Northern Rock.

Hiya Miss Poohs

LOL!! Nice to have that proof that the 'word on the street' is right! :T

I know it's a bit OT, but can I ask how long your husband has been on his DAS, and how he's finding it?

coolcait

One final (?:o ) thought...

If you sign a trust deed, you can't then opt for the Debt Arrangement Scheme until the Trust Deed is discharged (usually 3 years, but can be longer as there is no automatic discharge). Nor can you make yourself bankrupt - although your trustee can make you bankrupt if you fail to comply with the terms of the trust deed.

If you are in a DAS, you can't sign a Trust Deed. If the DAS is revoked (there are a number of reasons why it might be revoked) then you CAN sign a trust deed.

If you are in a DAS you CAN make yourself bankrupt (and if you do, that would be a reason for revoking it! )

HTH

LostBoy

Hi Coolcait ,
thanks for all your help.:A I have had a look at your links and the DAS links above point mainly to CAB for guidance. however, the CAB were the first people I contacted and they were the least effective in offering a solution. they did not mention DAS and advised I should contact a commercial debt management company. - atleast they offered me a yellow pages for some phone numbers :T - it was at that point I contacted CCCS. - who didn't mention it either. in fact neither did New Tomorrow mention a DAS. - no one has until now. and to be honest at first glance it may be the most appropriate. - i will contact the DAS helpline tomorrow.
would be keen to hear how miss poohs husband has found it. and who his administrator is??

it terms of my self employment: I run my own IT support company with a few laptops and networking tools. but mainly my tools of trade are pieces of software and I dont think you could call these assets. - so don't know if this makes any difference to what solution is best for us?
regards

coolcait

LostBoy wrote: »

Hi Coolcait ,
thanks for all your help.:A I have had a look at your links and the DAS links above point mainly to CAB for guidance. however, the CAB were the first people I contacted and they were the least effective in offering a solution. they did not mention DAS and advised I should contact a commercial debt management company. - atleast they offered me a yellow pages for some phone numbers :T - it was at that point I contacted CCCS. - who didn't mention it either. in fact neither did New Tomorrow mention a DAS. - no one has until now. and to be honest at first glance it may be the most appropriate. - i will contact the DAS helpline tomorrow.
would be keen to hear how miss poohs husband has found it. and who his administrator is??

it terms of my self employment: I run my own IT support company with a few laptops and networking tools. but mainly my tools of trade are pieces of software and I dont think you could call these assets. - so don't know if this makes any difference to what solution is best for us?
regards

Hiya again lostboy

I'm glad that you got something out of my posts. I was a bit worried about information overload!

I can understand where you're coming from when you say that CAB couldn't help you when you first went to see them, so you're maybe not so keen to go back to them. However, unless the person you saw is actually on the list of DAS money advisers, it might still be worthwhile considering going back - to see the DAS adviser.

I do get quite frustrated that DAS isn't publicised as widely as IVAs or Trust Deeds. It's not the right solution for everyone, but I personally think that more people would take it up if they knew about it.

New Tomorrow should have been going theough ALL of the options available to you. Especially if they were seriously recommending a trust deed to you. By law, the trustee must ensure that you are aware of the consequences before you sign a trust deed, and they must give you a copy of the Scottish Government's Debt Advice and Information Package (an A4 piece of paper folded in three!) which covers other options available to you, including DAS.

Did you manage to get in touch with the DAS helpline, and was it any use for you?

Take care!

kev1980_2

coolcait wrote: »

Hiya again lostboy

I'm glad that you got something out of my posts. I was a bit worried about information overload!

I can understand where you're coming from when you say that CAB couldn't help you when you first went to see them, so you're maybe not so keen to go back to them. However, unless the person you saw is actually on the list of DAS money advisers, it might still be worthwhile considering going back - to see the DAS adviser.

I do get quite frustrated that DAS isn't publicised as widely as IVAs or Trust Deeds. It's not the right solution for everyone, but I personally think that more people would take it up if they knew about it.

New Tomorrow should have been going theough ALL of the options available to you. Especially if they were seriously recommending a trust deed to you. By law, the trustee must ensure that you are aware of the consequences before you sign a trust deed, and they must give you a copy of the Scottish Government's Debt Advice and Information Package (an A4 piece of paper folded in three!) which covers other options available to you, including DAS.

Did you manage to get in touch with the DAS helpline, and was it any use for you?

Take care!

Hi Folks,

Sorry not been online for a while!!

Hi Coolcait,

I'll second that advice you've gave lostboy regarding " By law, the trustee must ensure that you are aware of the consequences before you sign a trust deed, and they must give you a copy of the Scottish Government's Debt Advice and Information Package (an A4 piece of paper folded in three!) which covers other options available to you, including DAS"

I was given all this information when i took my trust deed, the trustee that the CCCS has recommended are brilliant. So far they have been extremely professional and all is going to plan!

Hi Lostboy,

Glad to see you coming on the forum for help and advice to enable you to make a choice on the best way to deal with your debt!

Good Luck