Scottish and Skint

Miss_Poohs

Ok well the debt councellor came out to see me and my husband today.

Bless his heart, he's lovely but I don't think he's ever come across a case quite like it.

I'll do my best to explain the situation, but it's a tad involved.

OH has ran up huge debts behind my back - quite possible from before we even met, 14 yrs ago.

He has a DAS (which has been running for a yr and we're struggling) to repay several cards and an unsecured loan to the tune of about £80,000 (@ £570 a month for 12 yrs), plus a secured loan for £30,000 against his half of a house he owns jointly with his mum (she's elderly and not in the best of health), the property we reckon is worth about £90,000.

Together with that we also have a mortgage of £63,000 together on our own house which is worth we guess in the region of £85,000.

We have a young son, and for that reason alone I'd like to keep our house.

He earns £35,000 (can be nearer £40,000 with OT) I'm on £9500 for my part time job.

The truth - I can't see any other way out of this barr for him to go B/R.

The debt councillor threw around a few ideas.

1. Stop DAS and try for a wage arrestment.
or
2. Trust Deed - He's arranging for us to speak with a recommended (he works for the council Welfare Rights Dept) Trust Deed arranger. Debt Councillor wasn't sure TD company would or could help, so thats why he suggested an interview.
or
3. Sell our house to company who will allow us to continue to live in it and pay rent, and use any profit to reduce DAS.
or
4. Sell our house, try and protect his mums place and go BR

To be honest I'm not sold on any of the ideas.

I'd like to hear your input - remember we are in Scotland.

Miss_Poohs

Ohh Gawd have I scared you all into silence!!

I'm feeling increasing panicky about all this - and I've a bursting sore heid intae the bargain.

DH? - at work ofcourse.

coolcait

Hiya again Miss Poohs

I've just been reading back over all of your earlier posts, and I'm not really sure that there's anything I can add to what 've already said, as your circumstances haven't really changed (apart from the fact that you've now clarified that both properties have a mortgage, as before you had said that they were mortgage free).

What I can do, however, is summarise the info I've given earlier, to save you having to hunt it out!

1) Big question - can your OH actually make himself bankrupt? He can't go for the Low Income Low Asset route, given the amount he earns and the fact that he's joint owner of two properties. I doubt if he'll have a charge for payment, for example, as the DAS stops his creditors taking any court action against him. So he won't be able to show he's 'apparently insolvent'. That rules out two of the ways he can make himself bankrupt. The third way would be to get one of his creditors to 'concur' that he should be made bankrupt. Not an easy thing to do...

2) While he's in the DAS he can't sign a trust deed. Any trustee who tells him otherwise is giving him duff gen, and should be avoided. If his DAS is revoked, then he can consider a trust deed (also, if his DAS is revoked, and one of the creditors then takes court action against him, that would also be proof of apparent insolvency, which would allow him to apply for bankruptcy. Same thing if he did sign a trust deed, and it didn't become protected).

3) If he's out of the DAS, I would be astonished if a trustee didn't take him onto a trust deed, because the trustee would get a fair bit of money out of it! Given his income, the trustee would be looking for a fairly hefty contribution (maybe not much less than he's paying to the DAS) over a three year period, plus he'd be looking for a payment which covered the amount of your OH's share of the equity in the two properties. So, say around £40,000. How would you (as a couple or as individuals) raise that money, and how likely is it that you'd get competitive rates?

4) All of the above paragraph from "Given his income..." onwards would also apply to bankruptcy. Remember that, in Scotland, there's not a formula like they use in England and Wales to work out IPAs. A trustee could technically take every penny of what they assess as 'surplus' income. Most allow a bit of leeway, but you can't rely on keeping the first £99 or surplus, and then paying a percentage of the excess. (The same goes for trust deeds, perhaps more so). It's unlikely that an assessment of your OH's income would lead to him paying less than he does for the DAS. DAS SoAs tend to be fairly generous, especially for the longer running plans.

I'd be surprised if your money adviser hadn't seen cases that are similar to yours. It's fairly common for people to hide their debts from their spouses/partners until the point where they can't manage them any more. He'll also have seen cases where the person has a share in a couple of properties.

He may just not think that bankruptcy is the best option for your OH. Or maybe I'm just transferring my own view onto him. :o

One option you haven't listed is the possibility of looking at the mortgage to rent scheme for your MIL's house, rather than your own. As it's an ex-council property, it's probably more likely to be accepted onto that scheme (government run). Your MIL would be able to remain in her home, and look at using your OH's share of any profit to reduce his own debt. You could return to the idea of getting the DAS money adviser to put forward an offer of composition (similar to the idea of a full and final settlement) to your OH's creditors. Even if only some of them accept it, it would reduce the total debt, and the total repayments.

Finally, there's another option which most people are generally reluctant to mention. But I'll bite the bullet. Your MIL is, IIRC, in her mid-80s. With the most positive outlook in the world, is it likely that she will outlast the term of the DAS? :eek: It might be that your options look very different in a year or so...

Equally, given your MIL's age, if your OH did go bankrupt, or enter a trust deed, there has to be a higher than average risk of him becoming the sole owner of the property before he's discharged, and having to find a way of paying the full equity to the trustee, or allowing the trustee to sell the house (and I wouldn't be too hopeful of getting much back after all the fees have been taken off).

Please think about all of the implications of staying in the DAS/signing a trust deed/going bankrupt. Not just the angle of "we're paying how much, for how long?"

I know it's a tough decision, and there's a lot to think about. You know you can always run your thoughts past the people on here. You might want to run them past the money adviser too (or the likes of National Debtline).

Good luck with it all!

TellTheTruth_2

Miss_Poohs wrote: »

Ok well the debt councellor came out to see me and my husband today. < tell him to get lost. hope you did not let the "so and so" into your home. and now write a letter and send it recorded mail (so you have proof of delivery. stating............

"I note that there is only an implied license under English Common Law for certain people to visit me on my property without express permission; the postman and people asking for directions etc (Armstrong v. Sheppard and Short Ltd [1959] 2 Q.B. per Lord Evershed M.R.).

Take note, I revoke license under English Common Law for you, or any of your representatives to visit me at my property and if you do so without my permission, you will then be liable to damages for a tort of trespass. You would also be conspiring in a trespass if you sent someone to visit me nevertheless. Any trespassers you attempt to send therefore will be dealt with accordingly."

plus a secured loan for £30,000 against his half of a house he owns jointly with his mum (she's elderly and not in the best of health), the property we reckon is worth about £90,000. < in short, he used the "right to buy from the council and she is living there". The property was bought in her name to get round the legal side. Please tell ALL when posting.

The truth - I can't see any other way out of this barr for him to go B/R.< not recommended


2. Trust Deed - He's arranging for us to speak with a recommended (he works for the council Welfare Rights Dept) Trust Deed arranger. Debt Councillor wasn't sure TD company would or could help, so thats why he suggested an interview. < go on google and read the "trust deed acts". If there is any problems you will know what part of the acts have been broken.

To be honest I'm not sold on any of the ideas. <i am not sold on any of the other ideas as well................. personally i would just tighten the belt. Clip your husband/partner on the head and tell him to stop being a foolish person. Get his act sorted, and then sort things out.

I'd like to hear your input - remember we are in Scotland.

Whether you are in Scotland or wherever I think this is more logical and commen sense then anything else.

Nick Smith
p.s. Comments added in above.

Rictina

Hey I`m a scottish native too hun, dont worry your not the only one in trouble, its happening everywhere me included.

I carnt offer you any advice, as I really dont know what to say. I just wanted say "hi" & offer my support.

Whatever you decide follow your heart, & stick together as a family, this is the only way I got through the tough times.

There is a light at the end of the tunnel sweetheart.

Take care.

coolcait

TellTheTruth wrote: »

Whether you are in Scotland or wherever I think this is more logical and commen sense then anything else.

Nick Smith
p.s. Comments added in above.

Hello Nick

I will follow the exhortation in your user name, and "tell the truth".

You seem to have got hold of the wrong end of a lot of sticks:

- the OP is - as stated - in Scotland, so English common law may not apply

- the 'debt counsellor' is a CAB/local authority type money adviser, visiting the OP and her OH on their invitation. He's not a "debt collector".

- previous posts by Miss Poohs have explained that the council property was bought by her FIL, who had lived there as a council tenant. Her OH became a joint owner following her FIL's death, which was some time after the property was purchased from the council, IIRC.

- a "Trust deed" in Scotland is fairly similar to the English IVA.

- clipping a partner (of whatever gender) on the head (or anywhere else), is generally deemed as unacceptable behaviour and/or a form of abuse. Not a recommended means of 'communication'!

mustbedebtfree

coolcait wrote: »

Remember that, in Scotland, there's not a formula like they use in England and Wales to work out IPAs. A trustee could technically take every penny of what they assess as 'surplus' income. Most allow a bit of leeway, but you can't rely on keeping the first £99 or surplus, and then paying a percentage of the excess.

Coolcait, i've been reading up on BR (i'm in Scotland also) and spoke to NDL and CCCS and have never been told this. Can you maybe please point me in the direction of the Scottish IPA info that you have?

Thanks
MBDF

Miss_Poohs

Thank you every one (specially coolcait, I think TTT got the wrong end of the stick entirely).

I'm off to work in a min - must keep paying the bills, but I'll get back to you all later on when I'm home.

That clip round the head......... might give that some thought. (I jest of course!!)

Miss_Poohs

coolcait wrote: »

Hiya again Miss Poohs

I've just been reading back over all of your earlier posts, and I'm not really sure that there's anything I can add to what 've already said, as your circumstances haven't really changed (apart from the fact that you've now clarified that both properties have a mortgage, as before you had said that they were mortgage free). We moved house back in 2007, from a property that was indeed mortgage free, to the place we have now - bear in mind at that time I was living in blissful ignorance. He also lead me to believe at that time his mortgage on the other house was paid.

What I can do, however, is summarise the info I've given earlier, to save you having to hunt it out!

1) Big question - can your OH actually make himself bankrupt? He can't go for the Low Income Low Asset route, given the amount he earns and the fact that he's joint owner of two properties. I doubt if he'll have a charge for payment, for example, as the DAS stops his creditors taking any court action against him. So he won't be able to show he's 'apparently insolvent'. That rules out two of the ways he can make himself bankrupt. The third way would be to get one of his creditors to 'concur' that he should be made bankrupt. Not an easy thing to do... I think the debt coun. said if OH didn't get his TD protected then he could be made/declared B/R, have I picked that up correctly?

2) While he's in the DAS he can't sign a trust deed. Any trustee who tells him otherwise is giving him duff gen, and should be avoided. If his DAS is revoked, then he can consider a trust deed (also, if his DAS is revoked, and one of the creditors then takes court action against him, that would also be proof of apparent insolvency, which would allow him to apply for bankruptcy. Same thing if he did sign a trust deed, and it didn't become protected). Thats what the debt councillor explained to us.

3) If he's out of the DAS, I would be astonished if a trustee didn't take him onto a trust deed, because the trustee would get a fair bit of money out of it! Given his income, the trustee would be looking for a fairly hefty contribution (maybe not much less than he's paying to the DAS) over a three year period, plus he'd be looking for a payment which covered the amount of your OH's share of the equity in the two properties. So, say around £40,000. How would you (as a couple or as individuals) raise that money, and how likely is it that you'd get competitive rates? This is a problem, as while I would be prepared to take the BI for our house, I've no interest in his other place.The debt coun said that he though it would be dodgy for OH to get a TD - in terms of protecting 2 properties. The debt coun didn't want to give too much info in terms of a TD, as he said it was quite involved, which is why he's anxious that we talk with a TD practitioner - no obligation, on either half I must add.

4) All of the above paragraph from "Given his income..." onwards would also apply to bankruptcy. Remember that, in Scotland, there's not a formula like they use in England and Wales to work out IPAs. A trustee could technically take every penny of what they assess as 'surplus' income. Most allow a bit of leeway, but you can't rely on keeping the first £99 or surplus, and then paying a percentage of the excess. (The same goes for trust deeds, perhaps more so). It's unlikely that an assessment of your OH's income would lead to him paying less than he does for the DAS. DAS SoAs tend to be fairly generous, especially for the longer running plans. This is valuable info, and I didn't know that. I'm thinking perhaps I could hack 3 yrs at £500 - but 12!!!

I'd be surprised if your money adviser hadn't seen cases that are similar to yours. It's fairly common for people to hide their debts from their spouses/partners until the point where they can't manage them any more. He'll also have seen cases where the person has a share in a couple of properties.

He may just not think that bankruptcy is the best option for your OH. Or maybe I'm just transferring my own view onto him. :o

One option you haven't listed is the possibility of looking at the mortgage to rent scheme for your MIL's house, rather than your own. As it's an ex-council property, it's probably more likely to be accepted onto that scheme (government run). Your MIL would be able to remain in her home, and look at using your OH's share of any profit to reduce his own debt. You could return to the idea of getting the DAS money adviser to put forward an offer of composition (similar to the idea of a full and final settlement) to your OH's creditors. Even if only some of them accept it, it would reduce the total debt, and the total repayments. This was along the lines of my thoughts. What does concern me is, who would pay MILs rent? Being as she is in her 80s and on old age pension. Wouldn't it be frowned upon for the house to be sold to rent, then expect the rent to be funded by benefits?

Finally, there's another option which most people are generally reluctant to mention. But I'll bite the bullet. Your MIL is, IIRC, in her mid-80s. With the most positive outlook in the world, is it likely that she will outlast the term of the DAS? :eek: It might be that your options look very different in a year or so... Being a bit thick here, whats IIRC? MIL is an old witch and thinks of no one but herself - she'd be happy for her DIL, son and grandson to be in a BB, while she languishes in a 4 apartment house by herself. I know that sounds awful and you may well think badly of me. We've never argued, but she's the most selfish, self centered old wummin you could ever have the misfortune to meet.

Equally, given your MIL's age, if your OH did go bankrupt, or enter a trust deed, there has to be a higher than average risk of him becoming the sole owner of the property before he's discharged, and having to find a way of paying the full equity to the trustee, or allowing the trustee to sell the house (and I wouldn't be too hopeful of getting much back after all the fees have been taken off). The way I see it, is his other property is all spoken for anyway in terms of profit. I think we have both accepted there will be no lump sum left, but that way he'd be shot of the house and hopefully most of the debt.

Please think about all of the implications of staying in the DAS/signing a trust deed/going bankrupt. Not just the angle of "we're paying how much, for how long?"

I know it's a tough decision, and there's a lot to think about. You know you can always run your thoughts past the people on here. You might want to run them past the money adviser too (or the likes of National Debtline).

Good luck with it all!

Can't thank you enough for your input it all helps, and Im grateful.