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 When can I do a trust deed?
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Just Joined

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Posted - 05 March 2019 :  19:45:33  Show Profile  Reply with Quote
I hope you can help, this all seems really confusing to me and just need someone to make sense of it and explain in simple terms.

I lost my job at the end of last year and this means no I am 2 months behind on paying my debts, will be 3 this month. I currently have around 65k in unsecured debts.

My wife and I are currently selling our house and she is buying a house on her own, the mortgage has been sorted. There is equity in the property but this is being used for the deposit on the new property. All the debts are mine, and the equity is going to her due to payments she has put into it. The house should be sold in the next couple of months.

Due to the debts we are not in a good place at the moment and it has not yet been decided if I will be moving in with her into the new property or finding my own place. If I move in with her then I will have to pay her rent from my benefits payments.

I have the chance of starting a new job in the next week if I would like to take it but its far less money than I was on before and would no way be able to continue to pay my debts if I took the job but its better than being unemployed and taking benefits.

My questions are:

1. How long do you have to be employed before entering into a trust deed, is it 3 months?
2. Do I tell my creditors that I will be entering into a trust deed but not for 3 months, as I have missed 2/3 payments it would be 6 payments. Would I be expected to make payments to them in the next 3 months.
3. When I enter into the trust deed is my situation at the time taken into account i.e. I will be renting or will they look at that I had a mortgage previously, (while accumulating debt in last 6 months) and the equity has gone to my wife.

Apologies for the long post and you can probably see why it's so confusing to me.

Thanks for any help you can give.

Antony Rogers

TDA (Debt Adviser)
Trust Deed Expert

12917 Posts

Posted - 05 March 2019 :  22:34:20  Show Profile  Reply with Quote
Welcome to the forum rogerandout.

A number of significant issues here:

From the perspective of your creditors and potential trustee, you cannot give away assets to avoid repaying your creditors.

If youíre the legal 50% owner of the property, 50% of the profits of your house sale are legally yours. I recognise that you and your wife might view the situation from a different perspective, but I recommend you take direct personal advice on this issue ASAP. It could store up serious trouble for you both if you carry on with this plan unadvised.

In terms of your numbered questions:

1 - There is no minimum period of employment before beginning a trust deed.

2 - You should obtain debt advice before informing your creditors about your plans.

3 - A trustee will want to know about assets that you have recently disposed of.

Basically, I think you should obtain direct personal debt advice before going ahead with your other plans.

Qualified Debt Adviser & Forum Administrator - Ask me anything about Trust Deeds    
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Sharon Toal
Trust Deed Expert

351 Posts

Posted - 06 March 2019 :  11:12:07  Show Profile  Reply with Quote

I would seek advice regarding the sale of the matrimonial home. If the property is sold and you then ďgiftĒ your ex-wife your share of the net free proceeds, then that would be investigated as part of any insolvency process. Depending on the sums involved, this may or may not be an issue.

As TDA advises, I would always recommend seeking advice first before there re any property transfers.

Just to add some thoughts onto your questions.

There is no length of time you need to be employed before you enter into a statutory process however, most employment contracts have introduced a probationary period and it may be more appropriate to enter into a statutory debt solution when your financial position is more stable. For example, when you have successfully passed a probationary period, moved into rented accommodation and are aware of the associated costs of the new property.

There is nothing stopping you in the meantime in getting that advice which will hopefully put your mind at ease.

Sharon is no longer posting in the forum.
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Advanced Contributor

200 Posts

Posted - 06 March 2019 :  12:30:16  Show Profile  Reply with Quote
Hi rogerandout and welcome to the forum.

Sounds like itís been a really tough time over the last couple of months. Iím sure we can find a solution that will help with the debts itís just making sure itís the right one for you.

With #163;65,000 of debts there are a couple of options available such as Trust Deed, Debt Arrangement Scheme or Sequestration.

Different options have different implications for assets and in particular a house sale and what happens to your share of the net free proceeds. A Trust Deed and Sequestration will look at this transaction.

How much money in total do you expect to make from the house sale after the costs have been paid?

As others have said you need to be careful about selling the house and then giving your share of the net free proceeds to your wife to assist her buy another property. The downside of doing this is if you were to enter into a Trust Deed or Sequestration this would need to be looked into.

Try to remain positive, there will be a solution to help with the debts it's just working out the best one for you.
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