Trust Deed Forum - Some advice please
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pedasus
Contributor

8 Posts

Posted - 21 December 2019 :  20:37:17  Show Profile  Reply with Quote
My wife has HMRC debts and a bank overdraft. She is considering a trust deed. Our main question is around the house. Itís not in her name, does this mean the house will not be affected if she entered a trust deed or otherwise?
Any advice on this is greatly appreciated.

TDA (Debt Adviser)
Trust Deed Expert



13254 Posts

Posted - 21 December 2019 :  21:49:30  Show Profile  Reply with Quote
Welcome to the forum pedasus.

The usual test would be whether your wifeís named on the title deeds as a legal owner of the property. With a trust deed, this would get looked at and clarified before your wife decided to proceed.

Itís a similar scenario if she appointed a trustee to handle her bankruptcy. Clarity on this issue could be confirmed in advance. Itís only possible to appoint a trustee if someone is in a position to make payment (from surplus income usually) because this contribution funds the work and costs of the trustee.

A different scenario is being made bankrupt by a creditor. In this instance a trustee would get appointed after the fact, then make their decision regarding any property ownership.

Are the title deeds and mortgage in your name only?

It would also be helpful to know how much debt there is and your estimate of how much your wife can fairly afford to pay towards those debts each month (after paying bills and other expenses).

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pedasus
Contributor

8 Posts

Posted - 22 December 2019 :  07:30:14  Show Profile  Reply with Quote
Thanks for the reply..

The property, mortgage and deeds are in my name only. Debt level is around £17k in total. She has the ability to make payments solely. We have no joint accounts and arenít financially linked in any way.
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pedasus
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8 Posts

Posted - 22 December 2019 :  07:32:54  Show Profile  Reply with Quote
She can afford up to £250 - £300 per month.
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TDA (Debt Adviser)
Trust Deed Expert



13254 Posts

Posted - 22 December 2019 :  21:47:16  Show Profile  Reply with Quote
Hi pedasus.

Apologies for the slow reply.

I think itís worth contacting a debt adviser to run through income/expenditure and confirm a fair monthly payment.

At £300 per month, £17000 could be cleared using DAS in only nine months longer than the minimum trust deed term of four years. DAS isnít insolvency and is seen as a less severe route to deal with debt. It provides legal protection from creditors. You can read more about it at:

https://www.trust-deed.co.uk/debt-arrangement-scheme.html

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pedasus
Contributor

8 Posts

Posted - 22 December 2019 :  22:19:25  Show Profile  Reply with Quote
Thanks again, we will do.

Is the equity on the house ok as she is not on the mortgage/title deeds with both options?
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TDA (Debt Adviser)
Trust Deed Expert



13254 Posts

Posted - 23 December 2019 :  08:03:32  Show Profile  Reply with Quote
Hi pedasus.

It really doesnít sound like equity in the house is going to be an issue at all here. It just needs confirmation of this from the proposed trustee before going ahead.

This only applies to trust deeds and bankruptcy. Theyíre insolvencies so assets are relevant.

DAS takes no account of assets.

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Paul McDougall
Trust Deed Expert



41 Posts

Posted - 23 December 2019 :  08:15:11  Show Profile  Reply with Quote
I agree TDA - if you enter into a DAS plan, your assets are considered but not taken into account.

Under a trust deed, assets are conveyed to the trustee as part of the process and under bankruptcy, they vest. Given the property is not in your wife's name, this is irrelevant unless the property has been transferred from her name to yours.

I would speak to an advisor to talk about DAS.

p

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David Tannock
Trust Deed Expert



2323 Posts

Posted - 23 December 2019 :  10:09:27  Show Profile  Reply with Quote
Hi Pedasus and welcome to the forum.

Sorry to hear that your wife has found herself financially struggling.

How much does she owe to HMRC and at what stage are HMRC at with the correction of the debt? Have they suggested legal action or taken it yet?

As the others have said if the property is not in your wifeís name then she has a number of options available.

When it comes to a payment per month itís absolutely key to ensure that any payment is affordable and sustainable. Often when I speak with a client they always propose a higher payment and cut back on their spending to a level which might be too low for them to make work.

A good knowledgable advisor can work through this with you to see what payment is affordable and sustainable and then you can start to look at a DAS and the timescale and compare this with a Trust Deed.


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