TRUST DEED v CCCS

angeleyes1910

hi all, after some advice please (again!)

ok, so we're with the CCCS (but not been keeping in contact so probably not 'managed' by them properly) and owe around £20,000 for which we are paying £62 per month so going to be debt free in around 36 years!

Ive been looking into a trust deed and was told as most of the debts are in my husbands name (although we both raked them up), just to do a TD for him and keep to a DMP for me. Husband thinks that as we will have to release any equity in 3 years we are just as well to stay with CCCS (and get back in touch and up the payments) then release the equity ourselves in 3 years then clear our feet. whereas I feel that a TD, although we'll be paying more, we will be better protected, also at the end of the 3 years the equity would just be froms husbands half of house.

would anyone be able to suggest which is the best way to go as each us thinks our choices are best!

Charco_2

It depend on how much equity you're talking about!

I dont know why you'd release equity into your DMP and continue to pay and pay and pay for 36 years (it's almost criminal that your DebtManCompany have put you into an arrangement like this by the way!) when you could pay for three years into a TD release the equity and know that that is all the debt dealt with!

You'd probably need to let us know what your husband's concerns are about the TD to see if they can be allayed... at the end of the day it would be his TD so it would need to be his choice (although the choice will obviously have an impact on you and your household too)

angeleyes1910

hi again charco, thanks for replying. in his words "Its a step too close to insolvancy. It will also incur unnecessary fees, we should be able to manage easily without it"

Charco_2

My husband is worried a trust deed is too much like bankrupcy,
OK, it kind of is very like bankruptcy (Sequestraton for you Scotties!). Except in a sequestration you'd have to liquidate everything within a year and you'd probably be discharged sooner. It is an alternative to Bankruptcy but is slightly more debtor friendly in circumstances where a job might have reponsibilities that would prohibit BR.

He's worried about our credit score for future morgages
Let me re-assure you just now... if you're paying £62 a month into a DMP to deal with £20k of debt, your Credit Score is shot to hell as it is!

And i suppose hes worried about losing control over it all even tho there's not much control to begin with.
I know what you mean, both about "losing control" and about there being no control anyway. I would view it as taking control personally but maybe that's just me. OK so you're asking someone else for a bit of help but you're looking down the barrel of a 36 years DMP IF interest is frozen and remains frozen, doesn't sound like control to me! Getting someone else (a professional) to sort it out IS taking control (ironically!)

Also hes worried about the losing the house in order to pay the equity out in case we have to sell up.
This still depends on how much equity but get advice on this BEFORE signing the TD. Work out how much equity is available and pay for it then in the first year! If it's a small manageable amount then that shouldn't be too difficult but once it's dealt with then it's dealt with!
Your property would be valued BEFORE you signed the TD and so you'd know at that stage how much equity you're going to have to release to address it - obviously only your husband's half! Depending on the level of the equity then you could decide whether it was realistic for you to agree to the TD with that level of equity and be able raise it.
Would you be able to make extended payments to your TD for 6 months or a year, or remortgage to release the equity or rely on a friend or family member? (this will obviously depend on whther we're talking about £5k or £50k).

Have you looked into a Debt Arrangement Scheme (DAS) perhaps? The choice is yours but i honestly think your DMP was criminally bad advice and you should look into speaking to someone about TDs Sequestration and DAS... anything else is just misinformation which doesn't really suit you! You should be looking to speak to someone who could advise you on all three - any IP by law should discuss all three so you can make an informed decision!

angeleyes1910

THANKS CHARCO, i really appreciate your advice.