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nnrao
Regular Contributor

17 Posts

Posted - 04 January 2013 :  10:09:10  Show Profile  Reply with Quote
Dear All,
I'm presently in a situation were I'm unable to meet my payments to all my creditors in full. I'm looking for a solution were I could a payment break or reduced payment for a minimum period of 6 months to a maximum of 1 year. I will resume back to normal payment mechanism and may be through a agreed payment plan. I'm looking for,

1. Payment break
2. Minimal impact on my career.
3. I want to clear all my debts.

I'm 36 years old, a Scottish resident. We have 2 kids below 12 years and my elderly mother living with me. I'm in full time employed and at the prime of my career but there has not been any growth or rise with my present company (Public sector). As an IT professional with 16 years of industry experience I will be able earn almost twice as I'm earning presently if I do consultancy. All I require to do this, is some additional personal development time, this is were I'm looking for a break period.

I contacted PayPlan with my current situation and they offered advice that I could get a TrustDeed, a DAS or a DMP. I'm not sure of after effects of each of these solution. I need some clarification here,

1. If I take a Trustdeed will I be able to do IT Consultancy or contracting. Most companies who offer big wages do credit checks, so will it affect developing my career?

2. Once after I sign a Trustdeed will I be able to move home or change location due to job requirements, I need this flexibility to earn more and to settle debts quicker.

3. I'm not looking at a income decrease, I would defintely not be paid less than what I'm earning now and if I die my mortgage protection insurance will pay my family which could be paid to my creditors. There is a lot potential and the disposable income will only increase in the next five years if there are no debt effects in my career. What will happen if there is a rise in income to Trustdeed, DAS or DMP ?

Finally, if I could a break I will be back on track to meet the debts normally and settle them quickly. I defintely don't want to loose my career and growth. How should I handle this situation, please provide all your valuable suggestions and advices.

Thanks and regards,
Rao

nnrao
Regular Contributor

17 Posts

Posted - 04 January 2013 :  10:14:23  Show Profile  Reply with Quote
I forgot to mention,
The total debt is £48,000 with a current disposable income of only £200.
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plasticdaft
Advanced Contributor

1551 Posts

Posted - 04 January 2013 :  10:35:06  Show Profile  Reply with Quote
Welcome to the forum. The credit checks employers do arent scoring ones, they simply identify you as who you say you are.

Regarding moving home do you own your own home or rent? Moving if rented may be possible but you woukd likely fail landlords credit checks. If you own selling and moving may be difficult as well.

Just noticed you mention mortgage protection. Any equity in the property?

Paul

Trust deed completed Jan 2012,Trustee discharge Nov 2012.
A new dawn.
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plasticdaft
Advanced Contributor

1551 Posts

Posted - 04 January 2013 :  10:39:51  Show Profile  Reply with Quote
Should add that you credit score will be stuffed no matter what you do. Even if creditors agreed to a payment break they would still mark your files with arrears notices.

How much of your income is going on your mortgage?

I would speak to at least one more company to discuss your options.

You may find that directly contacting creditors to ask for a 6 month break gives you some breathing space.

Paul

Trust deed completed Jan 2012,Trustee discharge Nov 2012.
A new dawn.
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Trust Deed Assistant
Trust Deed Expert



8733 Posts

Posted - 04 January 2013 :  10:57:57  Show Profile  Reply with Quote
Welcome to the trust deed forum nnrao.

If, for any reason, you fail to meet your contractual debt repayments it is extremely likely that your credit rating will suffer. This is likely to be the case even if you agree temporary reduced payments with each of your creditors.

Would this hold you back at work? Probably not, most employers are using credit reports just to confirm identity as Paul says. However some firms or other types of employers are interested in your credit status and personal financial standing. This applies typically for financial roles and positions with access to sensitive material. You'll need to weigh up whether this might affect you.

It will likely be impossible to get a new mortgage if you are in a trust deed. Many people worry about credit checks to get new private rented properties, but over the years I cannot remember a forum poster than in fact wasn't able to accomplish this in the end.

In all debt solutions you'll be expected to pay what you can afford each month. This might apply if your income increased.

A trust deed will probably not result in your creditors being fully repaid and will have the most serious impact on your credit rating etc.

DAS (and a DMP normally - though it offers little protection or security or certainty) will eventually result in your debts being fully repaid. The effect on your credit rating will typically be less than is the case for a trust deed but might continue to have a negative effect for longer.

*** Qualified Debt Adviser & Trust Deed Forum Administrator ***    
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nnrao
Regular Contributor

17 Posts

Posted - 04 January 2013 :  12:27:32  Show Profile  Reply with Quote
Thanks for all your sugesstions and advises, presently I own my home on a mortgage, would it affect my wife getting a rented property in her name if I sign for trust deed?

I'm seriously not bothered about getting another credit ever in my life. None of my credit cards are active I closed them all an year ago and started paying the minimum. I have already started save and spend from earning life style and never buy anything from credit.

The biggest mistake I did was to buy a home in 2006 december, serious boom and they gave 96% interest only mortgage and managing this white elephant is what it brought me to this state, the equity went up in 2007 and I went to mortgage broker and he said that I might pay penality if I pre-close and as it is going up I should wait some more time to sell. But this "good time" never came until now and do anticipate it would ever come :-(. I'm on a SVR and it takes 40% of my personal income. Don't think would ever get a good deal after this financial mess.

If my employer or a company would just do credit check to identify me, then it is not a problem and my job doesn't involve any finance management. I'm in IT infrastructure operations.

I'm very happy to repay all my debts in full, after all I borrowed this money but I need flexibility to make settlement or repayments i don't want a DAS administrator or a trustee to take all my new income.

Would my creditors consider the future potential if I explain or would they turn me down and file a case against me by seing the current disposable income of £200?

Again I'm not bothered about getting credit in future, but I think some employment contracts do not allow employees or contrators with TrustDeeds or DAS and as mentioned above I shouldn't get into the trouble renting a place, getting an insurance or gas or electricity supply. Just basics needs of life shouldn't get affected by entering a Trust deed or DAS.

All my credit agreements are on my name, even if my credit rating drops, would my wife be able to rent a home, get utility supplies in her name?

Please advice,

Thanks
Rao
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nnrao
Regular Contributor

17 Posts

Posted - 04 January 2013 :  12:29:14  Show Profile  Reply with Quote
BTW, it is a Joint Mortgage and no arrears until december 2012
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Trust Deed Assistant
Trust Deed Expert



8733 Posts

Posted - 04 January 2013 :  13:01:57  Show Profile  Reply with Quote
Hello nnrao.

It you do not want any supervision over your affairs it's probably going to come down to what you can negotiate with your creditors yourself.

Will they accept your proposals? That's really impossible for us to tell you I'm afraid. The only way you'll find out is by trying.

If they do not accept them you would be exposed to debt recovery actions.

If you try and fail to negotiate your own agreements the options of DAS or a protected trust deed will normally still be open to you (so long as you don't leave it too late).

*** Qualified Debt Adviser & Trust Deed Forum Administrator ***    
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nnrao
Regular Contributor

17 Posts

Posted - 04 January 2013 :  13:29:52  Show Profile  Reply with Quote
Oh ok, I'm sorry I'm still confused. I really don't understand what happens if income rises? I searched through a lot of forums everywhere it says "change in circumstance" as a decrease in disposable income only and not an increase. Say if the initial TD / DAS repayment is £200 and in six months I change employment and this disposable income becomes £1000. Would the trustee / DAS Admin take the entire £1000 or would agree to take £250 and leave the £750 to me.

I don't know that's why I'm asking would the creditors be interested in discussing this with me directly.

I read something about Temporary repayment plan.

(Link removed)

is this an option for me, could a debt management agency setup this option for me.

Considering my above situation what would be a better option.

PayPlan gave me
1. DMP (May not be agreed as it would take 28 years it seems)
2. DAS (May not be agreed as it would take 28 years it seems)
3. TrustDeed (May be agreed, but worst after effects).

??

If I sign up for Trustdeed or DAS, could my wife still manage to get a rented house and other basics. Would she also suffer like me ?
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Trust Deed Assistant
Trust Deed Expert



8733 Posts

Posted - 04 January 2013 :  13:44:51  Show Profile  Reply with Quote
Hello nnrao.

Don't worry about it, but I've removed the link you posted. We ask members not to post external links in the forum.

The whole point of any of these debt solutions is to provide relief from unaffordable debt repayments. They may help you to reduce the amount that you pay towards your debts to the sum that you can truly afford.

The other side of this is that you are expected to pay what you can afford. Therefore, if your circumstances improve, it's quite right and proper that you pay the new increased affordable amount towards your debts.

Using the example you give, I cannot see a trustee, DAS administrator, DMP provider or creditors being happy about someone who can afford to pay £1000 towards their debts only actually paying £250. That's debt avoidance and simply isn't what these types of debt solutions are about.

Your wife's credit status is separate from yours, but there may be a link between your credit records if you have a joint account of some sort (which you appear to with your mortgage?).

As I mentioned previously, I cannot remember a scenario on here where someone in a trust deed was unable to rent privately.

*** Qualified Debt Adviser & Trust Deed Forum Administrator ***    
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Kevin Mapstone
Trust Deed Expert



2447 Posts

Posted - 04 January 2013 :  15:29:37  Show Profile  Reply with Quote
In terms of your payment level, there may well be more leeway available in a DAS payment plan than under a trust deed as you are after all paying your debt back in full eventually. There is no leeway in a trust deed - you have to pay whatever you can each month throughout.

However, in order to get a DAS DPP accepted you are likely to have to offer to increase your payment substantially anyway - £200pm may be accepted on a temporary basis but with a condition that you will increase the payment substantially at some point in order to clear the debt more quickly. Rule of thumb is 10 years max.

*** Recommended Trust-Deed.co.uk Partner *** Click for Kevinís help setting up a Scottish trust deed:    
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nnrao
Regular Contributor

17 Posts

Posted - 04 January 2013 :  15:33:08  Show Profile  Reply with Quote
Thanks and Yes I completely agree with what you say, the example I mentioned is not for avoiding debt, but to get a saving to settle it earlier than the TD agreement. I believe I dont get this option with TrustDeed but if I choose DAS then I could increase my repayment and bring down the repayment period.

Based on my situation and flexibility expectations which option would be better,
1. I'm happy to repay in full.
2. If my income increases, I'm happy to increase the repayment to clear it quicker.
3. less damages to my career and growth.

I'm not able to decide which option would give me the above would it be
1. DMP, 2 DAS or 3 TrustDeed.

TrustDeed and DAS are available only to Scottish residents, I asked earlier that, would I have flexibility in moving location because of job requirements. If I sign Trustdeed or DAS or DMP, Am I allowed to move out of Scotland before it ends?

Please advice,

rao
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nnrao
Regular Contributor

17 Posts

Posted - 04 January 2013 :  15:44:32  Show Profile  Reply with Quote
Thanks Kevin,
So is there a conditional posibility with DMP and DAS that say after 12 months I could increase the repayment from £200 to £1000, what type of documents should I need to produce to get it approved. I defintely have the confidence that I will able to do it sooner, the reason why I'm scared about TrustDeed is because it will give me a comfort to repay £200 say for five years, I dont have to work harder, loose my career and become lazy. I don't want reach my 40's with this attitude and die not achieving anything in life, I'm happy to take this conditional pressure which will keep me driving..to success.

Please advise.
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plasticdaft
Advanced Contributor

1551 Posts

Posted - 04 January 2013 :  15:50:42  Show Profile  Reply with Quote
I would consider what fees are payable in each of the options. Also if you seriously think you could increase your payment in 6 -12 months time I would perhaps contact your local citizens advice bureau with a view to getting in touch with all creditors asking for a payment holiday with the intention of upping your disposable income to a level which would allow you to meet your commitments.

I think you may find creditors more accepting these days.

Paul

Trust deed completed Jan 2012,Trustee discharge Nov 2012.
A new dawn.
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nnrao
Regular Contributor

17 Posts

Posted - 04 January 2013 :  15:58:33  Show Profile  Reply with Quote
Thanks, I will try to contact my CAB, end of day all that I'm looking for a short break I will be back on track.
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Trust Deed Assistant
Trust Deed Expert



8733 Posts

Posted - 04 January 2013 :  16:03:35  Show Profile  Reply with Quote
Hi nnrao.

On your previous specific question, it would not matter if you later moved away from Scotland. DAS or trust deeds could continue.

*** Qualified Debt Adviser & Trust Deed Forum Administrator ***    
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