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Justaman23
New Member

5 Posts

Posted - 05 November 2018 :  03:21:55  Show Profile  Reply with Quote
First of all nice forum you have here

Iím not currently in a TD or DAS, Iím self employed, a 49% shareholder and 50% director of a small Ltd company. Shares are worth £1.

Iím at the very early stages of looking to get one of the other
My current unsecured debt is 48k
I have 25k in personal loans and 23k in variable interest credit cards
Currently I am paying £1500 to all my debts, covering the loans fine and paying the minimum on the credit cards, literally living with nothing after bills.

My minimum savings will run out soon but I might make it once my dividends comes through next year, but a bad way to live.

Iím looking into a TD or DSA

I donít really want my other director to find out my finances are so bad.
All my debts are personal no business debt.
We have a company credit card so cannot lose this due to me.

I would prefer a TD but a DSA isnít out of the question either if it stops the interest on the cards.

So my questions relate to how much does a TD invade my Ltd company, would my fellow director be made aware of the TD, would our company be effected by it?

Or could I enter a TD and keep it private.

How does a DSA effect me being self employed(again will this get back to my colleague?)

Thanks for reading and your advice if you give me some

Kevin Mapstone
Trust Deed Expert



3613 Posts

Posted - 05 November 2018 :  09:57:52  Show Profile  Reply with Quote
Good morning Justaman23. Welcome to the forum - and thanks for the compliments!

Unless the memorandum and articles of association of the company specifically allow for it, then according to the Companies Act a director of a limited company should vacate office upon entering a Protected Trust Deed I'm afraid. So whilst it is possible to continue to be a director, but you should really be amending the articles with Companies House first, which would presumably need the sign-off of your fellow director.

The other thing to consider is that entering a Trust Deed would affect your own individual credit record for a while. If a ltd company is looking for credit then it isn't uncommon for banks to do credit checks on individual directors as part of the decision process. This would apply to a DAS too.

Under both procedures your details are recorded on a register that is available publicly to search, so I guess there is always a chance that someone connected with your business dealings could find out about your personal debt situation, though I would suggest the chances of that might be pretty slim.

Having said all of the above, it does sound as though the situation you are in may be spiralling and in order to avoid even worse outcomes (eg bankruptcy where you definitely cannot be a ltd co director) then it may be a case of choosing a solution that will sort matters out but is least likely to cause harm.

Would it necessarily be such a bad thing if your fellow director had to be told of this?

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Sharon Toal
Trust Deed Expert



295 Posts

Posted - 05 November 2018 :  10:44:54  Show Profile  Reply with Quote
Hi Justaman

It is also worthwhile mentioning that as part of the trust deed, your shares will be conveyed to the trustee and the trustee will have a duty of care to realise them for the benefit of your creditors.


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Justaman23
New Member

5 Posts

Posted - 05 November 2018 :  12:16:24  Show Profile  Reply with Quote
quote:
[i]Originally posted by Kevin Mapstone[/i]
[br]Good morning Justaman23. Welcome to the forum - and thanks for the compliments!



Hi Kevin, thanks for the detailed reply.

So we would have to specifically specify in the AOA that a director may actively use a Trust Deed? is there any way around this or is it a legal requirement?

Does a DAS require the same thing to be mentioned in the AOA? and will it cause any issues with the company maintaining the pre-existing credit card and overdraft function? they are in my colleagues name, but I am listed on the bank account as a card holder. The credit card is only listed to my Colleagues name (via the business account) even though we both use it to purchase products/goods.

I guess I wouldn't be too bothered if someone found out about my debt problems via a public search, it's just purely to save myself some embarrassment from having to actively tell him.

As he currently has no idea I have 48k in debts, I could actually pay this debt off long term, I can clear the loans and slowly chip away at the credit cards long term, but the interest being charged is a disaster, which is my fault as I used credit to cover my debt.

I'm now in control of my debt, with a pretty detailed spreadsheet which has every incoming/outgoing payment due and I have enough money to cover it until May next year, where a significant dividends payment would help me cover the rest, but I would still be paying the cards off for a substantial period.

Perhaps a DAS may be more beneficial as I would hate to affect the company in any way.

What are your thoughts on a DAS in regards to it affecting my position and any implications that may cascade onto the limited company (which would in turn tip off my co-director)
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Justaman23
New Member

5 Posts

Posted - 05 November 2018 :  12:18:54  Show Profile  Reply with Quote
quote:
[i]Originally posted by Sharon Toal[/i]
[br]Hi Justaman

It is also worthwhile mentioning that as part of the trust deed, your shares will be conveyed to the trustee and the trustee will have a duty of care to realise them for the benefit of your creditors.





Thanks Sharon, My dividends will be conveyed to the Trustee if I go down that route, I understand I will lose the majority or pretty much all of it.

From my understanding.
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Kevin Mapstone
Trust Deed Expert



3613 Posts

Posted - 05 November 2018 :  12:35:51  Show Profile  Reply with Quote
I can't see that a DAS would have any negative implications for the Ltd company other than what I have mentioned already regarding your own credit rating.
There is no need to update the aoa for a DAS and the company credit card accounts tare not in your personal name, it sounds like you are merely a cardholder which means they would not have to be included with your personal debts in a DAS debt payment programme.
How long do you think it would take you to repay your debts if the interest was frozen?

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Justaman23
New Member

5 Posts

Posted - 05 November 2018 :  13:13:30  Show Profile  Reply with Quote
quote:
[i]Originally posted by Kevin Mapstone[/i]
[br]I can't see that a DAS would have any negative implications for the Ltd company other than what I have mentioned already regarding your own credit rating.
There is no need to update the aoa for a DAS and the company credit card accounts tare not in your personal name, it sounds like you are merely a cardholder which means they would not have to be included with your personal debts in a DAS debt payment programme.
How long do you think it would take you to repay your debts if the interest was frozen?




Hi Kevin, I'm at the point where I don't care about my credit rating being negatively affected anymore.

My partner has the mortgage in her name I currently pay her a contribution into her account to assist with the bills, so she can continue to pay the mortgage with her income, this has been discussed.

If I was able to freeze all interest on my 48k debt, and consolidate the Personal loans and Credit cards into a 48K debt I would be able to pay off the debt within 3years 3 months at a rate of £1200 a month.

Currently with interest included, I estimate my debt will not be fully repaid until April 2023 (4 years 6 months) (providing I maintain my current employment or better, I do not expect my income to decrease at all over the next 5 years)

Edited by - Justaman23 on 05 November 2018 13:19:39
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np785641d
Regular Contributor

24 Posts

Posted - 05 November 2018 :  15:14:18  Show Profile  Reply with Quote
Go to Step Change, World class debt help
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Kevin Mapstone
Trust Deed Expert



3613 Posts

Posted - 05 November 2018 :  16:00:39  Show Profile  Reply with Quote
A DAS would seem likely to be the most sensible route, based on the figures you have mentioned. I would encourage you to be as realistic as possible when it comes to your budget though - there is no point in replacing one problem with another by over-estimating what you can actually afford.

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Justaman23
New Member

5 Posts

Posted - 05 November 2018 :  18:11:42  Show Profile  Reply with Quote
quote:
[i]Originally posted by Kevin Mapstone[/i]
[br]A DAS would seem likely to be the most sensible route, based on the figures you have mentioned. I would encourage you to be as realistic as possible when it comes to your budget though - there is no point in replacing one problem with another by over-estimating what you can actually afford.



Thanks Kevin, really appreciate the genuine responses.

I thought I had to pay as much as I could towards a DAS (minus the necessary living expenses) I would definitely benefit from some further advice on the matter if you can recommend a firm?

I'm based in the central belt of Scotland if that's any help.
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Voice of Reason
Advanced Contributor

116 Posts

Posted - 06 November 2018 :  07:54:18  Show Profile  Reply with Quote
You can get DAS carried out by Citizens Advice Bureaus or some local authorities on a free basis, although from what I hear they tend not to be too keen on anything involving trading/limited companies/directors.

The firms represented by the experts on this forum can act as continuing money advisors so you can hit the contact me button in Kevin or Sharon's signature and that would likely start the process off for you.
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Kevin Mapstone
Trust Deed Expert



3613 Posts

Posted - 06 November 2018 :  14:40:05  Show Profile  Reply with Quote
The DAS rules changed just over a week ago, so that there is now more flexibility possible. You can propose to pay a lower amount than what you can afford if you wish (though the flip side is that it may be more difficult to get your proposals agreed by creditors as a result).

AS Voice of Reason suggests, one of the firms here would be happy to set up and run a DAS Debt Payment Programme for you if appropriate, though would have to charge a fee to do so. You may be able to get the service for free instead via a free advice agency.

Happy to give you more details if you want to get in touch.

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